GST Reforms 2.0: The Group of Ministers (GoM) on GST rate rationalisation is likely to propose a sweeping overhaul of the current tax framework, with recommendations to scrap the 12% and 28% slabs, sources
told CNBC-TV18. The revamp is aimed at simplifying the GST structure through a sector-wide reclassification of rates, balancing both revenue and growth objectives.
According to the report, the Centre’s proposal involves both reductions and hikes across multiple categories, marking one of the biggest GST reforms since its rollout.
Fertiliser sector
GST on fertiliser acids and bio-pesticides may be cut sharply from 18% and 12% to a uniform 5%, easing costs for the agriculture sector.
Coal and solid fuels
Taxes on coal, briquettes, and other fuels derived from coal, lignite, and peat are proposed to be raised from 5% to 18%, signalling a revenue-focused shift.
Renewable energy
Products like solar cookers, solar water heaters, and related green energy devices could see their GST reduced from 12% to 5%, supporting clean energy adoption.
Textile industry
Key textile items, including synthetic filament yarns, manmade staple fibre yarns, sewing threads, carpets, gauze, and rubber thread,s may have their rates lowered from 12% to 5%, offering relief to the industry.
Apparel sector
The proposal seeks to raise the price threshold for 5% GST on apparel from Rs 1,000 to Rs 2,500. Readymade garments priced above Rs 2,500 could move into the 18% slab, up from 12%.
Footwear
For footwear priced below Rs 2,500, GST may be cut from 12% to 5%, while those above Rs 2,500 could see an increase from 12% to 18%.
The proposals will be taken up for discussion at the upcoming GST Council meeting scheduled between September 2 and 4.
