A major step in restructuring the Goods and Services Tax (GST) system has been taken after a key panel of ministers recommended scrapping the 12 percent and 28 percent tax slabs. The decision will now be placed before the GST Council, which holds the final authority on tax matters.

Officials said that the move aims to simplify the current multiple-rate structure and bring more clarity for businesses as well as consumers. If approved, the changes could lead to a three-tier structure instead of the existing four, making compliance easier.

The 12 percent slab currently covers a wide range of goods, including processed food items, household appliances, and certain industrial products. The 28 percent slab, considered the highest, applies to luxury and sin goods such as automobiles, air-conditioners, and tobacco products.

Experts believe that merging these slabs into lower categories could reduce disputes over classification of goods and also help in boosting consumption. However, it may also affect government revenue in the short term, which could be a key consideration during the council’s final discussions.

The GST Council is expected to take up the matter in its next meeting, where state finance ministers and the Union government will deliberate on the proposal before reaching a final decision.