GoM set up to rationalise GST rates

By:
Categories: GST Recent News

Setting the stage for an overhaul of the multiple tax rates under the Goods and Services Tax regime, the government has tasked a group of ministers (GoM) led by Karnataka Chief Minister Basavaraj S. Bommai with proposing a rationalisation of tax rates and considering the merger of different tax slabs within two months.

Currently, the GST regime has five broad tax rate slabs of zero, 5%, 12%, 18% and 28%, with a cess levied over and above the 28% on some goods, and special rates for items like precious stones and diamonds.

While Finance Minister Nirmala Sitharaman had announced, on September 17, a GST Council decision to set up two GoMs to shore up revenues, at the time, she had said that one of the panels will only look at tax rate rationalisation issues to correct anomalies, not the tax slabs per se. Ms Sitharaman had indicated that the effective tax rate under GST had slipped from the original revenue neutral rate of 15.5% to 11.6% ‘knowingly or unknowingly’ due to multiple rate cuts since GST’s introduction in July 2017.

Mr. Bommai’s seven-member group constituted by the Finance Ministry on Friday includes West Bengal Finance Minister Amit Mitra and Kerala Finance Minister K.N. Balagopal, as well as GST Council members from Goa, Bihar, Uttar Pradesh and Rajasthan. The group has been asked to suggest immediate changes, as well as a roadmap for short- and medium-term changes to the GST rate structure.

“The GoM shall review the current tax slab rates and recommend changes in the same as may be needed to garner required resources (and) review the current rate slab structure of GST, including special rates, and recommend rationalisation measures, including merger of tax rate slabs, required for a simpler rate structure in GST,” the terms of reference for the GoM stated.

Maharashtra deputy CM Ajit Pawar has been made the convenor of another GoM on GST System Reforms, which will look at tapping IT tools to minimise tax evasion and make compliance easier for taxpayers. This group will subsume two existing ministerial groups on IT challenges and revenue mobilisation owing to the overlap in their mandates, the Ministry said.

The GoM includes seven other ministers, including Tamil Nadu Finance Minister Palanivel Thiaga Rajan, Haryana and Delhi Deputy CMs Dushyant Chautala and Manish Sisodia, as well as ministers representing Andhra Pradesh, Odisha, Chhattisgarh and Assam in the Council.

Source from: https://www.thehindu.com/news/national/gom-set-up-to-rationalise-gst-rates/article36685257.ece

CLOSE
CLOSE