The Group of Ministers (GoM) on Goods and Services Tax (GST) rate rationalization will hold a meeting on September 25 in Goa.
This meeting may include discussions about possible changes to the current tax slabs and rates.
An official shared that the GoM, chaired by Bihar Deputy Chief Minister Samrat Chaudhary, last met on August 22.
Following that, a status report was submitted to the GST Council on September 9.
In the August meeting, the GoM assigned the Fitment Committee, which consists of tax officials from both the central
and state governments, to study the impact of tax rate changes on certain products and to collect more data.
Currently, GST is organized into four tiers, with rates set at 5%, 12%, 18%, and 28%.
Possible Changes to Tax Slabs
GST classifies essential goods under lower tax slabs or exempts them, while luxury
and demerit goods fall into the highest tax bracket of 28%, with an additional cess applied to them.
There has been talk of merging the 12% and 18% tax slabs, but no formal proposal has emerged yet.
Currently, the average GST rate has dropped to around 12%, which is lower than the revenue-neutral rate of 15.3%.
This drop has prompted discussions on adjusting and rationalizing the GST rates.
Opposition from Some States
Certain states, like West Bengal and Karnataka, have opposed changes to the GST slabs.
After the August GoM meeting, West Bengal Finance Minister Chandrima Bhattacharya stated that she was against any changes to the slabs.
Similarly, Karnataka’s Revenue Minister Krishna Byre Gowda questioned the need to modify the GST system, which he believes has now stabilized.
The GoM includes members like Uttar Pradesh Finance Minister Suresh Kumar Khanna, Rajasthan Health Services Minister Gajendra Singh,
and Kerala Finance Minister K N Balagopal, who are expected to discuss these matters further in the upcoming meeting.
