The Group of Ministers (GoM), led by the Karnataka Chief minister on Goods and Services Tax (GST) rate rationalization, will meet on 17th June 2022 to examine various options for tax rate changes and revenue augmentation.
This committee meeting will examine the current macroeconomic context and the need for tax rate and slab optimization. Sources say committee members will decide at the meeting when they could present the final report to the Council.
A sharp increase in the GST rate is unlikely soon amid the spike in inflation and the Reserve Bank of India (RBI) raising its benchmark policy rate. Also, policymakers are not sure of a tax rate increase on frequent-use items at this time when consumption recovery is seen to be still fragile.
High energy prices and supply disruptions due to geopolitical factors have been flaring inflation, prompting the government to rework import duty to control the prices. However, state governments are looking for ways to augment their revenue receipts as the GST compensation is coming to an end this month.
An increase in GST rates on some items, withdrawal of specific exemptions, and correcting tax anomalies become essential in this context. The panel includes Bihar’s deputy chief minister, Kerala finance minister, and representatives from Goa, West Bengal, Uttar Pradesh, and Rajasthan.
The ministerial panel’s agenda is to simplify the rate structure, correct the inverted duty structure, reduce classification-related disputes, and enhance GST revenues.
For any clarifications/feedback on the topic, please contact the writer at firstname.lastname@example.org
DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.