Rationalising GST Rates Returns To Discussion
The government has revived efforts towards GST rate rationalisation by reconstituting the ministerial group within the GST Council. The group, previously inactive after state election changes, now includes new members like Karnataka's revenue minister Krishna Byre Gowda and Uttar Pradesh Finance Minister Suresh Kumar Khanna as the convenor.
This move aims to simplify the complex tax structure, reducing the numerous GST rate slabs currently in use. Experts and industry leaders have been advocating for this, citing compliance issues due to multiple rates. With GST revenues stabilising at around Rs 1.6 lakh crore, the focus is back on restructuring rates for better compliance and certainty for investors.
The reconstituted group, with unchanged terms, is expected to also explore the future of the GST Compensation Cess. Recommendations may include a review of the current tax slab structure and potential changes for a simpler GST framework.
Earlier recommendations in 2022 led to the withdrawal of exemptions and concessional rates on various items, but a larger overhaul of GST rates was pending. The recent reformation of the ministerial panel indicates a renewed commitment to address these issues.
