There is likely to be a big change in the GST rate structure. It is understood that a committee of state ministers constituted to suggest changes in this may suggest a slab of 15 per cent by combining the slabs of 12 per cent and 18 per cent. Meaning then the slabs of 12 and 18 per cent can be removed and in their place the slab of 15 per cent will come. However, the panel is cautious about the proposal to increase the rate of minimum 5 per cent to 8 per cent due to inflation concerns. These things have come to the fore in a report by Economic Times.
GoM was formed to simplify GST rates
The Group of Ministers (GoM) was constituted by the GST Council, which will give its suggestions on simplification of GST rates, to settle disputes related to classification and increase GST revenue. The recommendations of the Group of Ministers will be discussed in the meeting of the GST Council and a final decision will be taken after that.
meeting may be held next week
Quoting sources, it has been written in the report that the meeting of this GoM is likely to be held next week, in which a final decision on rates can be taken and recommendations will be made. The GST Council may meet early next month to consider the report and the state’s revenue status.
What is the GST rate structure now?
GST has a 4-tier structure with rates of 5 per cent, 12 per cent, 18 per cent and 28 per cent. Also, there are special rates for certain goods like expensive metals. Due to all this, this system has become complicated. When GST was implemented in July 2017, the revenue neutral rate was around 15.5 per cent.
Revenue neutral rate is the rate at which there is no loss to the states or the center on implementation of GST. However, it has come down to 11.6 per cent due to discounts and reduction in rates on many goods.