Centre to scrap 12% tax slab? Shift to 18% will increase prices of goods and services; check what all fall under this tax slab

NEW DELHI: Amid strong opposition from the states, the central government is moving to reduce the four slabs of GST to three. The tax slab of 12 percent will be eliminated. The products under it may be shifted to 5% and 18% slabs. The 12% slab includes many daily necessities. If they are shifted to 5%, their prices will decrease. If they are shifted to 18%, their prices will increase. The highest slab is 28%.

The GST Council meeting to be held at the end of this month or early next month may discuss the proposal. There is no consensus in the sub-committee convened by Bihar Deputy Chief Minister Samrat Chaudhary on this proposal. Kerala Finance Minister KN Balagopal is also a member of this sub-committee. The states may raise strong objections in the meeting.

Items falling under the 12% slab

• Condensed milk, drinking water packed in 20 litre bottles, contact lenses, cheese, dates, dried fruits, frozen vegetables, sausages, meat products, pasta, jams, jellies, fruit juice drinks.
• Mayonnaise, tooth powder, feeding bottles, carpets, umbrellas, hats, bicycles, special household appliances
• Furniture made of cane/wood, pencils, crayons, handbags made of jute/cotton, shopping bags, footwear priced below Rs 1000, diagnostic kits, marble and granite blocks.
• Hotel rooms with daily rent up to Rs 7,500, low-cost air travel