Two major Goods and Services Tax reforms are likely to be delayed as inflation concerns persist. GST Group of Ministers on rate rationalisation is unlikely to meet the deadline to submit the report by September-end. GST GoM is likely to get an extension to submit the final report. GoM delays holding the meeting on continuing inflation concerns.GoM to consider doing away with 12% GST. GoM is likely to suggest items under 12% slab to be brought under the 5% and 18% GST rates. GoM is likely to discuss increasing the 5% slab to 6-7% to bring items to revenue neutral rate.
GoM to look at holding a meeting in mid-Oct if inflation moderates, 7-member rate rationalisation GST GoM headed by Karnataka CM Basavaraja Bommai. Other members include Bihar, UP, Rajasthan, West Bengal, Goa and Kerala.
GST Council in June 29 meet had given three months to GoM to submit the final report.
August Consumer Price Index or retail inflation spiked to 7% on higher prices of food. Inflation surged further from 6.71% in July. Retail inflation has continued to remain above the targeted 4% (+-2%) band for the eighth consecutive month.
The revenue neutral rate is 15.5% and we continue to be much below the revenue neutral rate. The 18% tax slab is the one from which the maximum portion of revenue is received.
The GoM had in its interim report made suggestions on correcting the inverted duty structure and removal of exemptions which were adopted by the GST Council.
The GoM final report will be discussed by the GST Council in its meeting.
Source: ET Now
https://www.timesnownews.com/business-economy/economy/exclusive-gst-gom-on-rate-rationalisation-unlikely-to-meet-deadline-to-submit-report-by-sep-end-sources-article-94247793
https://www.timesnownews.com/business-economy/economy/exclusive-gst-gom-on-rate-rationalisation-unlikely-to-meet-deadline-to-submit-report-by-sep-end-sources-article-94247793
