New Delhi, Aug. 15 -- In a major overhaul of the multitiered goods and services tax (GST) structure, the Central government has proposed scrapping the 12% and 28% slabs, among other reforms to India's indirect tax regime that are expected to stimulate economic growth.

In the short term, however, the GST restructuring could result in lower revenues flowing to the exchequer, a central government official said on Friday.

As per the proposal, most of the products and services attracting a tax rate of 12% and 28% will be shifted to the 5% and 18% slabs, respectively. A few remaining items in the 28% bracket-currently the highest-will be moved to a new 40% slab that will cover only a few 'sin goods' such as tobacco products, the official said...