NEW DELHI: The panel of state finance ministers looking into GST rate rationalisation will meet on November 27 to discuss the rate revision of about 40 items, as suggested by the fitment committee. The panel will also examine the proposal of merging GST slabs of 12% and 18% to a single 15% slab. “The Fitment Committee has recommended many changes including the change of slab. It includes 40 items, like gold, precious metals, while there are also withdrawal of some exemptions,” a senior official from the finance ministry told The New Indian Express.
The government had formed a Group of Ministers (GoM) in September, headed by Karnataka Chief Minister Basavaraj Bommai to propose rationalisation of tax rates, including immediate changes, as well as come up with a roadmap for short and medium-term changes to the GST rate structure, and give the report within two months.
While the merger of slab was ruled out that time by the finance minister, the order had said, “The GoM on rate rationalisation would review the current rate slab structure of GST, including special rates, and recommend rationalisation measures, including a merger of tax rate slabs required for a simpler rate structure in GST,”. “As the group will be meeting on Saturday, they will discuss the new slabs and rates and once there is consensus on the rates, it will be again discussed at the next GST council meeting, which is slated before the end of December,” the official added.
“This proposal to increase the rate of tax is not in sync with the objective of the GST Council to rationalise the tax rates. GST being an indirect tax, the increase in rate will ultimately be borne by the end consumer and hence, businesses may be apprehensive regarding the possible impact of these changes on the economy,” Charanya Lakshmikumaran, Partner Lakshmikumaran & Sridharan Attorney said.
“Further, even in cases where the rates of tax are reduced, businesses will have to pass on the benefit of such reduction to their recipients on account of the anti-profiteering measures under the GST Laws,” Lakshmikumaran added.
GST Rate rationalisation
There are about 40 items which are considered for rate hike
Possibility of merging 12% and 18% to one single slab at 15%
To hike compensation rate from 1% to 1.5%.
To raise 5% slab to 7%
To withdraw some relaxation given under Covid
The proposed GST on precious metal (gold/silver) will be hiked from 3% to 5%