The meeting of the Group of Ministers i.e. GOM on rationalisation of goods and services tax i.e. GST rate will be held on September 25. Changes in tax slabs and rates may be discussed in the meeting. Giving information, an official said that the GoM meeting on rate rationalisation will be held in Goa on September 25. The last meeting of the six-member GOM, chaired by Bihar Deputy CM Samrat Chaudhary, was held on August 22 and it submitted the status report to the GST Council on September 9.
During the August meeting, the GoM had tasked the adequacy committee, comprising tax officials from the Centre and states, to analyse the impact of changes in tax rates on certain items and collect more data. Currently, the GST is a four-tier tax structure with rates of five, 12, 18 and 28 per cent.
There will be a change in tax rates!
Under GST, essential goods are exempted or placed in a lower tax bracket, while luxury and demerit goods attract the highest tax bracket. The highest tax on luxury and demerit items is levied at the 28 per cent slab. There is talk of merging the 12 per cent and 18 per cent tax slabs of GST, but no proposal has come yet. At around 12 per cent, the average GST rate has fallen below the revenue neutral rate of 15.3 per cent. This has given rise to the need to initiate a debate on rationalisation of GST rates.
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These states opposed the change.
States like West Bengal and Karnataka are not currently in favour of the change in the flat GST. After the Group of Ministers meeting in August, West Bengal Finance Minister Chandrima Bhattacharya said, “I have said that there should not be any change in the GST slabs.” Karnataka Revenue Minister Krishna Byre Gowda had said that the Group of Ministers had to look at whether there was a need to modify the GST system, which is now largely stabilised.
He said, “What will you gain by spoiling it? We said we will discuss it (reducing the slab) in the next meeting.” The six-member group of ministers also includes Uttar Pradesh Finance Minister Suresh Kumar Khanna, Rajasthan Health Services Minister Gajendra Singh and Kerala Finance Minister KN Balagopal.
