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Key Points

Assam Chief Minister Himanta Biswa Sarma has publicly backed the central government's plan to simplify the GST structure. He stated that Assam's view is to support lowering GST to two primary slabs of 5% and 18%. This comes as the 56th GST Council meeting is underway to discuss major tax reforms. The proposed changes would significantly reduce the complexity of India's indirect tax system for consumers and businesses.

Key Points: Assam CM Himanta Sarma Backs Modi GST Slab Reduction to 5% and 18%

  • Assam CM supports Union government's GST rationalization proposal
  • Proposal aims to eliminate 12% and 28% GST tax brackets
  • Most goods would shift to simplified 5% or 18% tax slabs
  • Sin goods like tobacco would continue to attract a higher 40% levy
3 min read

Assam's view is to lower GST to 5% and 18%: CM Himanta Sarma

Assam CM Himanta Sarma supports the Union government's proposal to simplify GST into 5% and 18% slabs, as discussed in the 56th GST Council meeting.

"We are supporting the move of the Prime Minister. Assam's view is to lower GST to 5% and 18%. - Himanta Biswa Sarma"

Kamrup, September 3

Assam Chief Minister Himanta Biswa Sarma on Wednesday said that they support the decision of the Union government and stated that the State's view is to lower GST to 5% and 18%.

"We are supporting the move of the Prime Minister. Assam's view is to lower GST to 5% and 18%. We will completely support the decision of the Government of India," Sarma said while speaking to the reporters here.

The 56th Goods and Services Tax (GST) Council meeting is underway in the national capital, led by Finance Minister Nirmala Sitharaman.

The two-day meeting, being held on September 3 and 4, is expected to bring significant changes to India's indirect tax structure, with discussions centred around rationalising and reducing the number of GST slabs.

According to government sources, the proposal under consideration aims to eliminate the 12 per cent and 28 per cent brackets. Instead, most goods would be placed under either a 5 per cent or an 18 per cent slab. At present, there are four GST rate slabs, which are 5 per cent, 12 per cent, 18 per cent, and 28 per cent.

Nearly 99 per cent of items currently taxed at 12 per cent are likely to be moved into the 5 per cent slab, while around 90 per cent of items in the 28 per cent category could shift to the 18 per cent slab. Goods considered "sin" products would continue to draw a higher 40 per cent levy.

As per the proposals approved by the Group of Ministers (GoM) last month, almost all items in the 28 per cent slab, barring sin goods, would move to the 18 per cent slab, and those in the 12 per cent slab would move to the 5 per cent slab. Another slab of 40 per cent would exist, which will be levied on 6 to 7 items, largely sin and demerit goods.

The relevance of the meeting grew after Prime Minister Narendra Modi, in his Independence Day address, hinted at a "big reform of GST," calling it a major step ahead of the festival season. He had said people could expect a "very big gift" during Diwali.

The Council is also likely to discuss a short-term compensation mechanism for states, which will lose revenue due to rate cuts. However, the compensation cess structure, as it exists today, is unlikely to be extended.

The compensation cess, introduced in July 2017, was designed to make up for state revenue losses during the initial five years of GST implementation. The GST (Compensation to States) Act, 2017, was enacted to ensure that the Centre should provide compensation to states for a period of five years from the implementation of GST on July 1, 2017, to make sure that each state's tax revenue grows by 14 per cent annually over the base year of 2015-16.

The Council's discussions are expected to continue tomorrow, with decisions likely to be announced after deliberations conclude.

- ANI

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Reader Comments

P
Priya S
As a small business owner in Guwahati, this simplification will make compliance much easier. The multiple slabs were confusing for small traders. Good move by Assam CM to support this!
M
Michael C
While the rate reduction sounds positive, I'm concerned about how states will manage revenue losses. The compensation mechanism ending could create financial stress for states like Assam in the long run.
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Ananya R
Diwali gift from PM Modi indeed! 🪔 Lower taxes on everyday items will put more money in people's pockets. Hope the benefits actually reach common people and not just remain on paper.
S
Suresh O
Good to see Assam taking a progressive stance. The 5% and 18% slabs make much more sense than the current complicated structure. Hope other states also support this rationalization.
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Nisha Z
I just hope the tax reduction actually translates to lower prices for consumers. Sometimes businesses don't pass on the benefits. Government should ensure proper implementation.

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