Major GST Shake-Up Coming? 12% Slab May Vanish! From Dry Fruits to Oxygen, What You Use Daily Could Soon Get Cheaper or Costlier

New Delhi (The Uttam Hindu): Union Home Minister Amit Shah is initiating crucial discussions with states and central ministries to build consensus on long-pending reforms in India’s Goods and Services Tax (GST) system. The central proposal? Eliminating the 12% tax slab, a move that could simplify the multi-rate structure but might also lead to a combined revenue loss of ₹70,000–80,000 crore for the Centre and states.

If implemented, products currently under 12% GST — such as packaged food, furniture, diagnostic kits, and medical oxygen — would shift either to 5% or 18% slabs, increasing or decreasing tax burdens depending on reclassification.

Although the GST structure has stabilised over 8 years, any change now is politically sensitive. Even BJP-ruled states are cautious due to the potential loss in revenue. Recognising the complexity, Shah has already held initial talks with Finance Ministry officials and will soon begin consultations with all stakeholders to build consensus.

Amit Shah is often called upon in politically delicate economic decisions, such as past interventions in disinvestment and inflation management, highlighting the significance of his current role in GST reform.

Some opposition-led states have also proposed tax reliefs — such as reducing GST on life and health insurance from 18% to 5%, or making them tax-free — which further complicates consensus-building.

The GST Council is unlikely to pass sweeping changes in a single session. Voting may be required, and consensus is essential. While slab rationalisation has been under discussion since 2021, no concrete steps have been taken yet. The upcoming talks may finally break the deadlock.