More comprehensive reforms in the Goods and Services Tax slabs have been currently put to halt as the council has given the Group of Ministers (GoM) three more months to provide an approved finalized verdict and recommendations on GST rates rationalization.
GST rates will get increased from the 18th of July to address inverted duty structures and withdraw some exceptions. According to the Finance Minister, Ms. Nirmala Sitharaman, states are already aware of the effects of GST rate rationalization on inflation, and increased GST rates will compensate for the tax burden borne by many other activities in that value chain. It may correct the inefficiencies and will possibly impact the revenue collection. She also said that the neutral-revenue rate of the Reserve Bank of India has come off as a disadvantage to the GST system. According to her, there is not any sort of opposition to increased GST rates from any state. Nearly all states have accepted the center’s decision of increased GST rates.
The GoM or Group of Ministers, a council that is formed to scrutinize and give recommendations on the GST rates rationalization is asked by the center to give its recommendations by the 15th of July. The decision will include the applied GST rates on online gaming, casinos, horse racing, and cryptocurrencies. The council as of now is waiting for representation from the state of Goa on casinos.
The GST council will have the next meeting in the first week of August in Madurai to consider these recommendations by the Group of Ministers. The council is yet to take any decision on the demands of several states for the extension of the GST compensation cess. Many states have said that if not resolved, they will elevate this issue further to the Prime Minister of India, Mr. Narendra Modi.
Many opposition-ruled states have demanded that either the revenue sharing formula under the GST regime should be changed or the GST cess compensation should be extended by five years.
However, the GST council has not taken any decision on this issue and on crypto assets. According to the sources, the final report from the law committee is awaited.