FM Sitharaman to Meet GoM to Resolve 12% GST Slab Deadlock

Spatz04 March 26, 2025


Finance Minister Nirmala Sitharaman is set to meet the Group of Ministers (GoM) to discuss and resolve the ongoing deadlock over the 12% Goods and Services Tax (GST) slab, according to reports. The meeting is expected to address concerns raised by various industries and stakeholders regarding tax rates and their impact on businesses and consumers.

Key Agenda of the Meeting

The discussion will focus on:
✅ Reviewing the 12% GST slab – Industries have been seeking rationalization of tax rates to ease financial burdens.
✅ Balancing revenue generation and consumer relief – The government aims to maintain tax collections while ensuring fair pricing for end users.
✅ Addressing industry concerns – Sectors such as textiles, FMCG, and food processing have been lobbying for a reduction in GST rates to boost demand.

The GoM, chaired by finance ministers of various states, has been working on GST slab restructuring to simplify the tax system and resolve anomalies.

Why Is There a Deadlock?

The 12% GST slab applies to various goods and services, including packaged food, footwear, hotel stays, and some manufactured products. Industry bodies have argued that this rate creates financial strain, especially for MSMEs and small businesses.

While some states favor reducing the 12% rate to 5% for essential goods, others argue that doing so would significantly impact government revenue. The GST Council has been struggling to strike a balance between revenue neutrality and tax relief for businesses.

Possible Outcomes of the Meeting

🔹 Rationalization of the GST rate – The government may consider adjusting certain items under the 12% category.
🔹 Clarification on exemptions – Some products may be exempted or shifted to lower tax brackets.
🔹 Boost for businesses and consumers – A reduction in GST could make essential goods cheaper and improve market demand.

With the next GST Council meeting expected soon, all eyes will be on the outcome of this discussion and whether it leads to a breakthrough in the ongoing tax slab debate.

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