PANAJI:
This panel’s recommendations will serve as the foundation for a report that will be presented to the 55th GST Council meeting in November. The panel’s discussion on real estate will also include deliberations on a compensation scheme, which could have significant implications for the sector.
One of the key elements of the meeting will be the discussion of three proposed rate structures as part of the GST fitment process. The panel will consider three options:
Option 1: 7%, 14%, 21%
Option 2: 18%, 16%, 24%
Option 3: 9%, 18%, 27%
Currently, GST is a four-tier tax structure with slabs at 5%, 12%, 18%, and 28%. Under the GST, essential goods are either fully exempt or subject to the lowest tax rate, while luxury and sin goods attract the highest slab of 28%. On luxury and sin goods, a cess is imposed over and above the highest tax rate.
During the August meeting, the ministerial panel had broadly converged on retaining the four-slab tax structure. However, it had asked the Council-nominated Fitment Panel to examine the revenue implication on some items and seek relevant data.
Sources in privy to the matter suggest that the panel will also focus on streamlining tax rates for the real estate sector, which has been lobbying for more clarity on GST rates for construction materials and services for some time.
