As the GST Council, comprising state finance ministers and senior officials, prepares for crucial meetings beginning Tuesday, attention is focused on how the body will address services currently taxed at 12%, 18%, and 28%.
Currently, hotel rooms priced up to I7,500 a night fall under the 12% bracket, while those above the threshold attract 18% GST. Air travel, too, faces slab-based differentiation, with economy and business class tickets taxed at different rates. The Centre, which has proposed an overhaul of the system, is keen to resolve such classification disputes.
Revenue concerns, however, make the transition challenging. Banking services, for instance, are widely seen as overtaxed at 18%, but a rate cut appears unlikely in the near term. Insurance services may face dual treatment — with term and health covers at revised rates, while car and home insurance remain at 18%.
Homeowners have also sought relief, pointing out that apartment maintenance fees above ₹7,500 a month attract an 18% levy, even when paid to resident welfare associations. Many argue this penalizes middle-class households in urban condominiums.
While most of the council’s current focus is on goods rationalization, some tweaks in services may also feature — including salon services. In contrast, casino entry fees are likely to move into the proposed 40% slab for sin and luxury goods.
The GST fitment committee, made up of state officials, will begin deliberations Tuesday, ahead of the Council’s formal meeting on September 3–4. The broader aim: ease the burden on consumers while simplifying the regime, potentially by eliminating the 12% and 28% slabs and retaining a near-universal structure covering 99% of items.
