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The GST Council on Friday made public that Group of Ministers to give recommendation on rate rationalisation has been reconstituted with Deputy Chief Minister of Bihar, Samrat Chaudhary as new convenor.
Chaudhary will replace Finance Minister of Uttar Pradesh Suresh Khanna. The office memorandum, dated February 27 but posted the Council website now, says other members of the reconstituted panel are Uttar Pradesh Finance Minister Suresh Kumar Khanna, Goa Transport Minister Mauvin Godinho, Rajasthan Medical, and Health Services Minister Gajendra Singh. It also includes West Bengal Finance Minister Chandrima Bhattacharya, Karnataka Revenue Minister Krishna Byre Gowda, and Kerala Finance Minister K N Balagopal.
After JD(U)-BJP alliance formed the government in Bihar in January this year, the finance portfolio was given to the State Deputy Chief Minister Samrat Chaudhary, replacing Vijay Kumar Chaudhary. The reconstitution of the GoM on GST rate rationalisation was required so as to include Chaudhary in the panel.
Out of seven members GoM, four are from NDA and three from opposition-ruled States. There is no change in terms of reference. Initially, the committee was to give report within two months. It was also asked to suggest measures which can be implemented immediately and a roadmap for changes to be taken in short and medium term.
Key proposal
One of the key proposals has been to bring down number of primary rates to three from four. This could mean new rate by merging either 12 per cent and 18 per cent to 15 per cent or 5 per cent and 12 per cent to 8 per cent. Although some items would become cheaper, many items would move to upper rate bracket and result in inflation. This argument deferred the rationalisation in the past and now experts feel it will be a challenging exercise
The seven-member GoM has been tasked with suggesting required rate rationalisation and correction of inverted duty structure with an objective of simplifying the rate structure, reviewing the GST exemption list and enhancing revenues from Goods and Services Tax (GST). It was originally set up in September 2021, under then Karnataka Chief Minister Basavaraj Bommai. Under his chairmanship, the panel had submitted an interim report to the GST Council in June 2022, proposing changes in tax rates for some goods and services to rationalise the levy.
The rate rationalisation panel will now have a task at hand to submit a final report to the GST Council suggesting changes in tax rates and slabs to usher in reforms. As of now, the GST regime has four broad tax slabs of 5, 12, 18, and 28 per cent, along with four special rate of zero, 0.25, 1.5, 3. and 6 per cent A cess is levied over and above the highest 28 per cent rate on luxury and demerit goods.
Once the committee gives its report, the Fitment Committee will discuss and finalise the agenda for the GST Council. Based on the recommendations of the Council, the Centre and States (including three Union Territories with assemblies) will notify rates
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