The GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on December 31, a day after she will meet her state counterparts for pre-budget consultations.
The council is expected to discuss the report of the group of finance ministers of states on rate rationalization, which will be presented during the meeting. Official sources said reforms in duty reversal in some commodities are also likely to be discussed.
The panel has reviewed items under an inverted fee structure to help reduce refund payments.
The fitment committee comprising tax officials from states and the Center has made several “comprehensive” recommendations to the panel of finance ministers regarding changes in slabs and rates and exclusion of several items from the exemption list.
Presently, there is a four tier slab structure of GST 5, 12, 18 and 28 per cent. Essential goods are either exempted or taxed in the lowest slab, while luxury and demerit items are subject to the highest slab. On top of the highest slab, cess is levied on luxury and demerit items.
There has also been a demand to merge the 12 and 18 per cent slabs and exclude certain items from the exempted category to balance the impact of slab rationalization on revenue.
Former West Bengal Finance Minister Amit Mitra has urged the Union Finance Minister to roll back the proposed hike in textiles from 5 per cent to 12 per cent, saying it will close around one lakh textile units and lead to the loss of 15 lakh jobs.
Telangana Industries Minister KT Rama Rao has also urged the Center to withdraw its proposed plan to hike GST rates.
Even industry bodies have opposed the hike in tax by five per cent, citing higher compliance cost for the unorganized sector and micro, small and medium enterprises (MSMEs), besides making clothing of the poor expensive.