In order to ease the structure of the Goods and Services Tax (GST), the Group of Ministers (GoM) will hold a meeting on 20th October to discuss recommendations for rate rationalisation that apply to a variety of goods, including textiles and footwear. The items under evaluation fall into the 12 per cent tax level.
The GoM was chaired by Bihar Deputy Chief Minister Samrat Chaudhary, who was entrusted with rationalising the GST rate and simplifying the tax structure, which is currently in its eighth year since the indirect tax regime began. It is expected that rationalisation will improve collections and ease the burden of compliance.
In a report for the upcoming GST Council meeting, which is anticipated to take place in November, the GST GoM on rate rationalisation provides specific rate recommendations.
The ideas for rate rationalisation on about a hundred items may be discussed by GoM. Among other topics that affect the average person and day-to-day living, the GoM will consider footwear and textiles.
The other members of the GoM are Karnataka revenue minister Krishna Byre Gowda, Rajasthan health minister Gajendra Singh, Keralan finance minister Suresh Kumar Khanna, and his West Bengal and Kerala equivalents Chandrima Bhattacharya and KN Balagopal.
Later this month, the GoM is anticipated to deliver its recommendations, which the GST Council will then be able to consider at its November meeting.
Each state designates its finance minister or another minister to serve on the council, which has 33 members and is chaired by the Union finance minister. The council uses a three-fourths majority to uphold its judgement.
It is anticipated that the Group of Ministers would examine the gradual elimination of the 12 per cent tax bracket by rearranging everything to create a three-tiered tax structure with rates of 5 per cent, 18 per cent, and 28 per cent.
While removing products from the 12 per cent category is a good start, it will take time because Governments must carefully consider the impact on income before agreeing.