GST The Group of Ministers (GoM) on rationalization of rates will meet on September 25. Changes in tax slabs and rates may be discussed in the meeting. An official said that the Group of Ministers on rate rationalization will meet on September 25 in Goa. The six-member Group of Ministers (GoM), headed by Bihar Deputy Chief Minister Samrat Choudhary, last met on August 22 and submitted a status report to the GST Council on September 9. During the August meeting, the GoM had tasked the Fitment Committee, comprising tax officials from the Center and states, to analyze the impact of tax rate changes on certain items and gather more data. Currently, GST is a four-tier tax structure with rates of five, 12, 18 and 28 percent.
Plan to merge 12 and 18% GST rates
Under GST, essential goods are either exempted or placed in lower tax slabs, while luxury and demerit goods attract the highest tax slab. Luxury and demerit goods attract a cess over and above the highest slab of 28 per cent. There are talks of merging the 12 and 18 per cent tax slabs of GST, but no proposal has come up so far. At around 12 per cent, the average GST rate has fallen below the revenue neutral rate of 15.3 per cent. This has led to the need to initiate discussions on GST rate rationalisation. States like West Bengal and Karnataka are currently not in favour of changes in the GST slabs.
There is no need for any change in GST slab
After the meeting of the GoM in August, West Bengal Finance Minister Chandrima Bhattacharya had said, “I have said there should be no change in the GST slabs.” Karnataka Revenue Minister Krishna Byre Gowda had said the GoM had to analyse whether there was a need to tinker with the GST system, which has now largely stabilised. “What will you gain by disturbing it? We said we will discuss it (reducing slabs) in the next meeting,” he had said. The six-member GoM also comprises Uttar Pradesh Finance Minister Suresh Kumar Khanna, Rajasthan Health Services Minister Gajendra Singh and Kerala Finance Minister K N Balagopal.
Image Credit: India-Tv.