New Delhi, Aug. 16 -- The Central government has proposed a sweeping restructuring of the goods and services tax (GST) regime, seeking to abolish the 12% and 28% slabs-a move aimed at easing prices for a wide range of goods and services and boosting economic activity.

While the shake-up is expected to offer relief to consumers, a senior government official on Friday acknowledged that it could create a short-term revenue gap for the exchequer.

Shift in rates, creation of a new 'sin goods' slab

Under the plan, 99% of goods and services currently taxed at 12% will be moved to the 5% bracket. Most products in the highest 28% slab will be shifted to 18%.

Only a handful of 'sin goods'-such as tobacco products-will be placed in a new 40% sla...