NEW DELHI: The Group of Ministers responsible for Goods and Services Tax (GST) rate rationalisation is set to convene on September 25 in Goa to deliberate on potential adjustments to tax slabs and rates.
The six-member Group of Ministers (GoM), led by Bihar Deputy Chief Minister Samrat Chaudhary, last convened on August 22.
They submitted a status report to the GST Council on September 9. The government aims to finalise the process of GST rate rationalisation by the end of the year, as per sources.
According to sources, the panel is likely to deliberate on the possibility of merging 12% and 18% goods and services tax slabs into a single unified rate, though no formal proposal has been put forward yet. Meanwhile, the Centre is also concerned about the revenue generation -- the average GST rate at about 12% is below the revenue-neutral rate of 15.3%.
“The revenue-neutral rate is crucial as it represents the level at which government revenue remains stable following the implementation of GST. The lower-than-anticipated average rate has raised concerns about the government’s ability to generate adequate revenue, leading the Group of Ministers (GoM) to initiate discussions on possible adjustments to the existing tax rates. However, not all states are in agreement with the idea of altering the goods and services tax structure,” a top source told TNIE.
Notably, both West Bengal and Karnataka have voiced their concerns and are hesitant to support any immediate changes to the tax slabs.
Following the August meeting, West Bengal finance minister Chandrima Bhattacharya expressed her opposition to changing the current goods and services tax rates, advocating for the preservation of the existing structure.
In a similar vein, Karnataka Revenue Minister Krishna Byre Gowda remarked that the GST system has largely stabilized over the past few years, warning that any alterations could upset this equilibrium. He also mentioned that the Group of Ministers (GoM) would revisit this topic in their next meeting.