New Delhi, Aug. 15 -- In a major overhaul of the goods and services tax (GST) structure, the Central government has proposed to do away with the 12% and 28% tax slabs, which is expected to bring relief on a large number of goods and services and stimulate the economy.

In the short term, though, it could mean a revenue gap to the exchequer, a central government official said on Friday.

As per the proposal, 99% of the products and services in the 12% slab will be shifted to 5% and most of the items in the current highest slab of 28% will be moved to the 18% slab.

The remaining few items in the 28% bracket will be moved to a new 40% slab, which will be an outlier, and cover only a few 'sin goods' such as tobacco products, the official sai...