The group of ministers (GoM) tasked with simplifying the goods and services tax (GST) structure will meet on October 20 to deliberate on rate rationalisation proposals related to food, footwear and textile items, a source told Moneycontrol. The items under review are in the 12 percent tax bracket.
Led by Bihar deputy chief minister Samrat Chaudhary, the GoM on GST rate rationalisation has been tasked with simplifying the tax structure, now in its eighth year since the introduction of the indirect tax regime. Rationalisation is expected to ease the compliance burden and also boost collections, experts say.
“The GST GoM on rate rationalisation will submit some rate suggestions in a report for the next GST Council meeting likely to be held in November,” the source said.
Rate rationalisation proposals on about a hundred items are likely to be discussed by the GST GoM. “The GoM will initially look at food items, footwear and textiles, which concern the common man and impact daily life,” the source said.
Uttar Pradesh finance minister Suresh Kumar Khanna, his West Bengal and Kerala counterparts Chandrima Bhattacharya and KN Balagopal, Rajasthan health minister Gajendra Singh and Karnataka revenue minister Krishna Byre Gowda are the other members of the GoM.
Reconstituted on November 1, 2023, the GoM is likely to submit its recommendations later this month, which will allow the GST Council to take them up in the November meeting.
The 33-member council is chaired by the Union finance minister, with each state nominating its finance minister or any other minister to the body. The council takes its decision by a three-fourths majority.
As reported by Moneycontrol, the GoM is likely to look at the gradual elimination of the 12 percent slab by moving all the items to consolidate the system into a three-tiered structure of 5 percent, 18 percent, and 28 percent rates.
“While moving items out of the 12 percent slab is the way forward, it will take time, as states will carefully examine the revenue implications before agreeing,” the source said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
