The Central government has clarified that there is no immediate proposal to reduce Goods and Services Tax (GST) rates, ruling out any short-term relief for the common man. The clarification came from Minister of State for Finance Pankaj Chaudhary during a Lok Sabha session on Monday, July 21.
GoM on GST rate rationalisation still working
Responding to a question raised by MP Ujjwal Raman Singh from the Allahabad constituency, Chaudhary said that any changes in GST rates are decided based on the recommendations of the GST Council.
“GST rates are prescribed on the recommendations of the GST Council, which is a constitutional body composed of representatives from States/UTs and Centre,” Pankaj writes in the written reply.
He added that a Group of Ministers (GoM) was formed during the Council’s 45th meeting held on September 17, 2021, to look into GST rate rationalisation. However, the GoM has not yet submitted its report.
No clarity on reduction timeline or percentage
Since the report is still awaited, the government said there is no decision yet on how much the GST rates could be reduced or when such a reduction might come into effect.
The minister stated that questions regarding the percentage of reduction or its timeline “do not arise” at this stage.
Four-slab GST structure awaits overhaul
The GST regime currently operates with four main tax slabs—5 per cent, 12 per cent, 18 per cent, and 28 per cent—along with special rates for certain goods and services. The rate rationalisation exercise, initiated in 2021, has been delayed several times due to political transitions in some states and evolving economic conditions. The GoM’s recommendations are expected to be crucial in shaping the next phase of GST reforms.
The clarification comes amid growing calls for tax relief as inflationary pressures continue to strain household budgets.