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Why was the number of items in a 28% GST slab reduced to 50?

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Why was the number of items in a 28% GST slab reduced to 50?
posted Feb 27, 2018 by Deepak Jangid

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1 Answer

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The basic concept of having a Tax rate of 28% or the highest slab rate was to tax sin and luxury products for ex. Car, Tobacco etc.

Many products which were part of 28% tax slab rate where not justified to be kept in that slab rate. For ex. Chocolate is not a sin product and also not a luxury one.

Chewing gum, wafers, marbles, soap, oil etc are something which a middle-class person uses in their day to day life.

In the process of deciding the products to keep in highest slab rate Govt. became a bit over ambitious by deciding to keep the other things (non-sin products) in highest rate as those products attracted the same effective rate in the previous regime which made them keep it in the same bracket.

Now when they have removed 177 items they have already sacrificed the revenue from 16,000 cr to 20,000 cr hit which they believe was necessary for the benefit of common man.

Keeping sin products and Luxury products in highest slab rate will continue at least for some time till things stabilize, any decision to reduce the tax rate on any product hits their revenue which they always have to consider and this is the reason they still kept some products in highest tax slab rate.

answer Feb 28, 2018 by Mukul Chag
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