CBIC Cautions Against 'Premature Speculation' Ahead Of GST Council Decision On Rate Cut

The Central Board of Indirect Taxes and Customs on Tuesday requested people and media outlets to avoid speculations on the Goods and Services Tax rate cuts. In a post on X, formerly known as Twitter they added that the decision will be announced after the GST Council meet which is scheduled on Sept. 3 and 4.

"Premature speculation gives rise to baseless rumours and may cause volatility in the markets," the board responsible for administering indirect taxes said in a post on X.

The GST Council that comprises of the Centre and States will take a collective decision, explained CBIC.

The council, comprising finance ministers of all states and UTs besides the Centre, will deliberate on the recommendations by the Group of Ministers on rate rationalisation, compensation cess and health and life insurance. The GoM comprising state ministers met earlier this week and, in principle, agreed to the Centre's proposal for a two-slab GST.

According to the reform proposed, GST should be a two-rate structure of 5% and 18%, classifying goods and services as 'merit' and 'standard'. A special rate of 40% will be levied on select few items like ultra-luxury cars and sin goods. Meanwhile, some labour-intensive items will continue to enjoy concessional lower rates of 0.1%, 0.3%, or 0.5% to support employment-intensive sectors.

Currently, GST is a four-tier structure of 5%, 12%, 18% and 28%.

Prime Minister Narendra Modi, during his Independence Day speech, announced the next-generation GST reforms, dubbed GST 2.0, to rationalise the existing tax rates. Calling GST one of the most significant reforms since its introduction in 2017, Modi stressed the need for the upcoming changes to benefit the common man, farmers, the middle class, and MSMEs.