Rate rationalization of the goods and services tax (GST) may be pursued in the coming fiscal year, and the government may provide an indication of this in the upcoming Interim Budget.
The Group of Ministers on GST Rate Rationalisation was reconstituted in November of this year, and there are hints that the GST Council may pursue the subject further in the coming fiscal year. According to highly placed sources, no meeting of the GoM on rate rationalization is currently scheduled.
"There is no intimation of a meeting post the reconstitution of the GoM," the insider said. Following the Rajasthan assembly elections, the GoM may require a new member. Shanti Kumar Dhariwal was a member of the GoM and the former Rajasthan government's minister for local self-government, urban development and housing, and law and legal affairs.
The practice is expected to resume after the 2024 General Elections, but an announcement could be made in the Interim Budget, which is slated to be presented on February 1.
"GST revenue has more or less stabilized at over Rs 1.6 lakh crore per month, and compliance is improving." Rate reductions are likely to be implemented in the new fiscal year, according to another source familiar with the situation. However, once the deliberations begin, the committee's final report could take some time.
Karnataka's revenue minister Krishna Byre Gowda is a member of the reconstituted GoM on GST rate rationalization, while Uttar Pradesh Finance Minister Suresh Kumar Khanna serves as convenor. Mauvin Godinha, the Goa minister for transport, Panchayati Raj, housing, protocol, and legislative affairs, is also a member of the seven-member GoM, as is Bihar finance minister Vijay Kumar Chaudhary, West Bengal finance minister Chandrima Chattacharya, and Kerala finance minister KN Balagopal.
The present GST regime includes five broad rates of zero, 5%, 12%, 18%, and 28%, as well as a cess that is collected in addition to the highest rate on some luxury and demerit items. In June 2022, the GoM submitted an interim report recommending modifications in tax rates for some goods and services in order to rationalize the levy.
