The Group of Ministers (GoM) will be going to meet for GST rate rationalisation on September 25 in Goa.
Reason
To discuss potential changes to tax slabs and rates.
What does the word GST rate rationalisation mean?
GST rate rationalisation means reviewing and adjusting the existing GST tax rates to make the tax structure simpler, consistent and efficient. This process helps in minimizing tax disputes and improving compliance.
Previous Meeting
The GoM last met on August 22 and submitted a report to the GST Council on September 9.
The six-member GoM includes ministers from Bihar, Uttar Pradesh, Rajasthan, Kerala, West Bengal, and Karnataka.
The GoM tasked the committee to analyse the impact of changing tax rates on certain items.
Current Structure of GST
Current GST has four-tier tax structure which are 5%, 12%, 18%, and 28%.
Essential items are either exempted or in the lowest slab, while luxury and sin goods are taxed at 28% plus an additional cess.
Discussions on Tax Slabs
There have been a discussion about merging the 12% and 18% slabs, but no formal proposal is final yet.
Currently average GST rate is now around 12%, which is below the revenue-neutral rate of 15.3%.
Concerns from States
Both states like West Bengal & Karnataka expressed concerns about altering the slabs as they prefer to maintain current slabs to evaluate system stability before making changes.
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