The ministerial committee on GST rate rationalisation is expected to meet on September 25 to discuss the adjustment of tax bands and rates.
“The GoM meeting on fare rationalization is scheduled for September 25 in Goa,” an official told PTI.
A six-member ministerial group led by Bihar Deputy Chief Minister Samrat Chaudhary met on August 22 and submitted a status report to the GST Council on September 9.
At its August meeting, the committee tasked a adequacy committee, comprising central and state tax officials, to analyse the impact of the rate changes on certain items and collect more data.
The current Goods and Services Tax (GST) has a four-tier tax structure of 5%, 12%, 18% and 28%.
Under GST, essential items are exempted or taxed at the lowest rate, while luxury and cons are taxed at the highest rate. Luxury and cons are taxed at the highest rate of 28%.
There has been talk of merging the 12% and 18% tax brackets, but so far nothing has been proposed.
At around 12%, the average GST rate has come down to 15.3%, which is lower than the import neutral rate. This has created the need to start discussions on rationalizing GST rates.
States like West Bengal and Karnataka have not voted in favour of changing the GST tiers for now.
West Bengal Finance Minister Chandrima Bhattacharya said after the August government meeting that “there should be no change in the scope of GST.”
Karnataka Revenue Minister Krishna Bhair Gauda said the government should analyse whether there is a need to “disturb” the GST system which is now largely stable.
“What do you achieve by disrupting it? We said we will discuss (reducing the Slavs) at the next meeting,” Byre Gowda said.
The six-member government includes Uttar Pradesh Finance Minister Suresh Kumar Khanna, Rajasthan Health Services Minister Gajendra Singh and Kerala Finance Minister KN Balagopal.