GST Council is likely to meet in June; retail inflation in India soared to an eight-year high of 7.79 per cent in April 2022, against 4.23 per cent in April 2021
Even as there is a plan to revise GST rates on various products in the upcoming GST Council meet that is likely to take place in June, the proposed rate rationalisation may be delayed due to the prevailing high inflation, according to reports. The government was planning to raise the goods and services tax (GST) in the next two years and reduce the number of slabs. The group of ministers set up by the GST Council to review rates is yet to finalise its report.
The government plans to reduce the number of GST slabs from the current four to three. Currently, the GST system has four slabs — 5 per cent, 12 per cent, 18 per cent, and 28 per cent. A new median slab of 15 per cent may also be introduced in place of 12 per cent and 18 per cent slabs. There are 480 items under the 18 per cent slab, from which about 70 per cent of the GST collections come. Apart from this, there is an exempt list of items like unbranded and unpacked food items that do not attract the levy.
In September last year, the GST Council had set up a panel of state ministers, headed by Karnataka Chief Minister Basavaraj Bommai, to suggest ways to augment revenue by rationalising tax rates and correcting anomalies in the tax structure.
“Rate rationalisation is difficult with inflation at this level and has to wait till the situation improves,” according to an ET report quoting a senior government official.
© 2018 CA Chandan Agarwal. All rights reserved.