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The ministerial panel on GST rate rationalisation on Thursday broadly converged towards retaining a 4-tier slab structure and asked the committee of tax officers to analyse the implication of tinkering rates on some items and present it before the GST Council.
The Goods and Services Tax (GST) group of ministers (GoM) on rate rationalisation chaired by Bihar Deputy Chief Minister Samrat Chaudhary, is not in favour of merger of the tax slabs and feels the current four rates need to be maintained, sources said.
Before the crucial Goods and Services Tax (GST) council meeting scheduled for September 9th, the reconstituted Group of Ministers on GST for rate rationalisation met for the first time on Thursday.
Ahead of the goods and services tax rate rationalisation exercise, the Central Board of Indirect Taxes and Customs has initiated a process of overhauling the existing product classification under the indirect taxes regime to further simplify it and remove ambiguity.
Ahead of the goods and services tax rate rationalisation exercise, the CBIC has initiated a process of overhauling the existing product classification under the indirect taxes regime to further simplify it and remove ambiguity.
The convenorship of the Group of Ministers (GoM) on the goods and services tax rate rationalisation may have to change hands with Goa Chief Minister Pramod Sawant joining the committee.
Bihar Deputy Chief Minister Samrat Chaudhary has been appointed as the convenor of the GoM on GST rate rationalisation.
GST Council may refer the issue of GST rates on cigarettes, bidis to the Rate Rationalisation Committee to notify maximum tax rate of 20% under CGST and 20% under SGST from the current 28%, sources told Business Today on Tuesday.
Under GST essential and semi-essential goods, which constitute 70-80 percent of India’s consumption, attract a GST rate of five percent or 12 percent. However, luxury items are taxed at 28 percent, contributing significantly to government revenue. If rates are rationalised, government’s revenue may take a hit, but more than that lower income group will be impacted.
With a new coalition government at the helm, a key economic reform involving GST rate rationalisation may be further delayed. Many experts feel that as rate rejig impacts inflation, there may be pressure to not undertake it at all. However, there is a section that feels there is still hope for this long-pending reform.