The GST Council has approved a two-tier rate structure of 5% and 18%, effective September 22. While states backed the move, West Bengal flagged a ₹47,700 crore revenue loss. Tax on demerit goods remains undecided after a 10.5-hour marathon meeting.
In a significant move aimed at simplifying the indirect tax regime, the Goods and Services Tax (GST) Council on Wednesday cleared a two-tier rate structure of 5 per cent and 18 per cent, which will come into effect from September 22.
Bihar Deputy Chief Minister Samrat Choudhary emphasised that the decision was taken with full consensus. “All states were on board for the rate rationalisation, and it was a collective decision,” he said, underscoring the rare unity on a contentious issue.
While most states welcomed the simplification, West Bengal Finance Minister Chandrima Bhattacharya voiced concerns about the financial impact. She pointed out that the overall revenue loss due to rate rationalisation is estimated at ₹47,700 crore, which could put pressure on state finances in the coming months.
On the question of demerit goods—such as tobacco and luxury items—Uttar Pradesh Finance Minister Suresh Khanna clarified that no final call had been taken. “No decision has been taken on the tax incidence on demerit goods, and imposing a levy over and above the 40 per cent would be decided later,” he said.
The latest session of the GST Council, its 56th meeting, was nothing short of a marathon. Running for 10.5 hours, the meeting saw the Centre and states debate and fine-tune proposals before arriving at key decisions.