InvestorQ : Is it true that government will hike GST rates to compensate for lower revenues this year?
NISHA Nayak made post

Is it true that government will hike GST rates to compensate for lower revenues this year?

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Priyanka N answered.
2 months ago
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In a move that could be largely inflationary, the GST Council is expected to enhance the lowest base rate of GST from 5% to 8%. This is likely to be announced in the next GST Council meeting. Ironically, they are likely to raise taxes on the lowest slab of 6% and raise that level to 8% of global traffic. The GST Council in its next meeting might raise the lowest tax slab to 8% from 5%.

Currently, the GST is 4-tier structure with GST rates varying from 5%, 12%, 18% and 28%, respectively. Normally, essential items and items of mass consumption are either at zero tariffs or at the base 5%.Now this 5% is likely to be rationalized to 8%. Of course, in the case of luxury items, the GST goes all the way to 28% and the Council normally an additionally cess on these amounts. The increase in entry level tax from 5% to 8% will yield the government ad additional Rs.150,000 crore to the government.

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