Arun Jaitley hints at pruning more items in 28% GST slab

New Delhi: Union finance Minister Arun Jaitley on Tuesday hinted at pruning the list of items in the highest goods and services tax (GST) bracket of 28% after revenue in the new regime equalise collections previously.

Under the GST regime implemented from July, over 1,200 products and services have been fitted into one of the 5%, 12%, 18% and 28% tax slabs based on the principle of keeping the total tax incidence at almost the same level as previously as well as keeping revenue collections neutral.

Jaitley said some of the items should never have been in the 28% slab and the GST Council in the last 3-4 meetings has slashed rates on over 100 items, thereby bringing them down either from 28% to 18% or from 18% to 12%.

“We have been gradually bringing them down. The whole idea is, as your revenue collections neutralise we must prune it and that’s the pattern in which the Council has so far been functioning. I see that as a future guide as far as the Council is concerned,” Jaitley said at the India Today Conclave.

The GST Council is scheduled to meet next on 10 November and may consider lowering tax rates on a host of goods such as handmade furniture, plastic products and daily use items like shampoo.

The Council last month approved an Approach Paper to be followed by the fitment committee while deciding on future rate revisions. He said consumers are noticing the tax paid on goods they buy in the GST regime as previously excise duty was embedded in the price of the product.

Under the GST regime, which has subsumed more than a dozen central and state levies including excise duty, service tax and VAT, is a more transparent tax. The product, in the previous regime, “didn’t show you are paying so much excise (duty),” he said.


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