On June 17, the Group of Ministers on GST Rate Rationalization will convene

16 Jun 2022 , 10:09 AM

According to reports, a group of ministers working on GST rate rationalization will meet on June 17 to discuss possible changes to tax rates. They said the Group of Ministers (GoM) is likely to consider possible adjustments to the tax slab, but that the panel’s final report will take some time.

The GST Council, which includes finance ministers from the Centre and states, is expected to convene by the end of the month to examine the GoM interim report on rate rationalization, among other things.

With inflation at an all-time high, sources in the finance ministry have stated that there is now little room for GST rate rationalization on goods and services.

Last year, the council appointed a seven-member team of state ministers, led by Karnataka Chief Minister Basavaraj Bommai, to recommend measures to increase income by lowering tax rates. The last time the GoM met was in November 2021.

The GoM has been directed to evaluate products with an inverted duty structure in order to reduce rebate payouts and to review the Goods and Services Tax (GST) exempt list in order to broaden the tax base and prevent the input tax credit (ITC NSE 1.27 percent) chain from being broken.

A four-rate system under the GST exempts or taxes basic commodities at a low rate of 5%, while luxury and demerit goods are taxed at a peak rate of 28%. The other two tax brackets are 12 and 18 percent. Furthermore, a 28 percent cess on luxury, demerit, and sin items is placed on the highest slab.