The Goods and Service Tax (GST) rate rationalisation process may start afresh after induction of new members in the GST Council. Sources infomed CNBC-TV18 that the Group of Ministers (GoM) on rate rationalisation is all set to meet and are waiting for government formation in five states.
“When it comes to the GST rate roadmap, rate rationalisation is key to the future of GST,” government sources said.
“Proposals suggested by the earlier GoM on rate rationalisation, under then Chief Minister of Karnataka BS Bommai, will too be looked at afresh as the council has reconstituted the GoM,” sources further added.
On November 1, the GST Council notified the reconstitution of GoM on rate rationalisation. As per the notification, the GoM will now be headed by Uttar Pradesh (UP) Finance Minister Suresh Khanna. The seven-member panel includes Finance Ministers from UP, Goa, Kerala, Karnataka, West Bengal, Rajasthan and Bihar.
“The proposals which will now be made by the new GoM will be the key to the future of GST,” sources revealed.
The Bommai panel had submitted an interim report in June 2022 and had sought more time from the GST Council on their recommendations on rates as the panel could not conclude discussions and reach consensus. At the two-day meeting in Chandigarh, the interim report had pitched for relook at exemptions, correcting the inverted duty structure and further deliberations on the rate structure.
On the other hand, growing GST collections have given a lot of confidence to the government.
“Healthy GST collections are providing a cushion to the government to meet economic requirements. The growth in GST collections is due to higher GDP, plateauing inflation, compliance improvement and formalisation of economy,” as per sources.
It remains to be seen how the developments unfold at the upcoming GST council meetings.
Source: CNBC TV 18
https://www.cnbctv18.com/finance/gst-rate-roadmap-rate-rationalisation-gom-18505821.htm
https://www.cnbctv18.com/finance/gst-rate-roadmap-rate-rationalisation-gom-18505821.htm
