GST Panel to Meet Virtually Regarding Rates Rationalisation

GST Rates Rationalisation

The committee will look into the current macro-economic context as well as the tax rate and slab optimization. However, no decision concerning the proposal has been taken yet.

About the GST Rates Rationalisation Panel

The ministerial committee was formed and constituted a couple of months ago and is headed by Karnataka Chief Minister Basavraj Bommai. In the meeting which is held on this Friday, a final call will be taken regarding the final report of the rate rationalization which will be presented in front of the GST council.

The meeting will be held online keeping in mind the covid protocol and guidelines. The ministerial panel will focus on simplifying rate structure, correcting inverted duty structure, reducing classification-related disputes, and enhancing GST revenues.

The panel constitutes of Bihar’s deputy chief minister Tarkishore Prasad, Kerala’s Finance Minister K.N. Balagopal, and representatives from West Bengal, Goa, Rajasthan, and Uttar Pradesh.

The issue regarding the Spike in GST Rates

Recently, there’s a steep high which is witnessed in the GST rates because of an unstable economy and wholesale inflation. Given the high inflation, the Reserve Bank of India (RBI) is also raising its benchmark policy rate to tame the rise in the cost of living which will further increase the GST rates.

However, the policymakers are still unsure about the increased tax rates on the mass-consumed items. Inflation has resulted in the overall increase of GST rates, the unstable market economy, and increased petrol prices due to geopolitical and other factors.
The GST compensation revenue provided by the center will also come to an end this month so states are also looking for ways to compensate their revenue by increasing the GST rates on some specific items and withdrawing certain exemptions.