GST Rate Rationalisation on September 25: A Group of Ministers (GoM) panel tasked for reviewing Goods and Services Tax (GST) rates and discussing possible changes to the current tax slabs and rates, will meet on September 25, 2024, in Goa. The meeting is part of the ongoing efforts to streamline and rationalise the GST structure, and the six member committee will be led by Bihar Deputy Chief Minister Samrat Chaudhary.
The other members of GoM include Uttar Pradesh Finance Minister Suresh Kumar Khanna, Rajasthan Health Services Minister Gajendra Singh, Kerala Finance Minister K N Balagopal, West Bengal Finance Minister Chandrima Bhattacharya, and Karnataka Revenue Minister Krishna Byre Gowda.
The GoM had last met on August 22 and submitted two status reports to the GST Council during its 54th meeting on September 9, outlining their initial findings. One of the key areas of focus has been evaluating the impact of changing tax rates on certain goods and services. During the August meeting, the panel had instructed a fitment committee of tax officials from the Centre and states to analyze the implications of potential tax rate changes and gather more data. The data gathered by this committee will be crucial in determining if there should be adjustments to the GST slabs and rates.
Currently, the GST system in India operates on a four-tier structure and goods and services are taxed at different rates, depending on their category, which are 5 per cent, 12 per cent, 18 per cent and 28 per cent. Essential goods, such as food items, are either exempted from GST or are taxed at the lowest slab of 5 per cent. Luxury and demerit goods, which include items like cars and tobacco products, are taxed at 28 per cent. Further, some of these items also attract a cess, which is levied over and above the 28 per cent GST.
Even as no formal proposal has been made, there has been ongoing discussion about merging the 12 per cent and 18 per cent slabs into one unified rate.
Per reports, not all states are in favour of changing the GST structure, with West Bengal and Karnataka particularly expressing reservations about making any immediate changes to the tax slabs. West Bengal Finance Minister Chandrima Bhattacharya had said that the current structure should remain untouched for now. Further, Karnataka Revenue Minister Krishna Byre Gowda said that the GST system has largely stabilised in recent years, and any changes could disrupt this balance.
During the 54th GST Council meeting, Finance Minister Nirmala Sitharaman had said, “Two new GoMs (Group of Ministers) have been decided. One is on medical and health insurance. It will be the rate rationalisation GoM headed by the Deputy Chief Minister of Bihar but with newer members added for this limited purpose. We have told them that they will look into this matter and come up with a report by the end of October 2024. The GST Council which will meet in November will finalize based on this report which will come from the GoM.”