The Group of Ministers (GoM) of the Goods and Services Tax Council that was tasked with rate rationalisation is likely to be reconstituted soon, with Karnataka Revenue Minister Krishna Byre Gowda set to become a member.  

The position of convenor has been lying vacant since change of government in Karnataka. Former Karnataka chief minister Basavaraj Bommai was earlier the convenor of the seven-member committee. A decision on the convenor will be taken after the GoM is reconstituted. 

However, a major overhaul of the GST rate structure is unlikely ahead of the general elections in 2024. “The GoM is being reconstituted. It is only after that that the process of rate rationalisation will be reviewed,” said a senior official.  

A full revaluation of the GST structure remains a lengthy process and may take more time, sources indicated.

The seven-member GoM, which includes members from Bihar, Goa and Kerala, among others, was set up in September 2021 and was tasked with rationalising GST rates to simplify the tax structure and correct the inverted duty structure and reduce classification related disputes.  

The current GST regime has five broad rates of zero, 5%, 12%, 18% and 28% as well as a cess that is levied above the highest rate on specified luxury and demerit goods.  

The GoM had submitted an interim report in June 2022 recommending changes in tax rates for some goods and services to rationalise the levy. 

The fitment committee of the GST Council is, however, still reviewing the proposal regarding the taxation of millets as it could impact the tax on other products that use millets as well. The Council was looking at a proposal to lower the GST rate on millet-based mixes to zero or 5% from the current rate of 12% or 18%.  

The fitment committee is also examining the GST rate on sedans of a certain size, which may be taken up in the next meeting of the GST Council. A discussion on this had come up during the deliberations on the compensation cess to be levied on multi-utility vehicles.  

Officials said there is no proposal to review the GST rate on cement for now. Industry has sought a reduction in the 28% GST rate, pointing out that it is essential for the progress of infrastructure projects.

Source: Business Today
https://www.businesstoday.in/latest/economy/story/gom-on-gst-rate-rationalisation-to-be-reconstituted-soon-but-decision-unlikely-before-2024-ls-polls-390390-2023-07-19