GST Council Considers Implementing Dual Tax Slabs for Services

Updates from April 21st, 2017

Previously, a flat 15% tax applied to most services, with 17 specific exemptions. The GST Council’s fitment committee is now evaluating whether a single 18% tax rate or a dual-slab system (12% and 18%) would be more appropriate for services. A two-slab structure could balance the sector by lowering costs for certain services while raising them for others.

Conversely, a uniform 18% GST could lead to higher prices across all services, potentially impacting the sector adversely. Despite initial intentions for a single tax rate, discussions include placing essential services, frequently used by the general public, into the 12% bracket to lessen consumer tax burdens.

As reported in Moneycontrol.

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