A panel of state ministers on Friday’s rationalization of GST rates failed to reach consensus as some members oppose changes to tax caps and rates, sources said. However, the Group of Ministers will present a status report to the GST Council on the consensus reached at the previous meeting of the GoM on November 20, 2021, it added.
The GoM will seek an extension to submit its final report, they said, and adding tax rates will also be discussed at the upcoming Council meeting later this month. The GST council, chaired by Finance Minister Nirmala Sitharaman, will meet in Srinagar on June 28-29.
The Council had set up a seven-member panel of state ministers last year, led by Karnataka’s chief minister, Basavaraj Bommai, to propose ways to increase revenues by rationalizing tax rates. The government has been instructed to review items with a reverse-tax structure to minimize refund payments, and to revise the GST-exempt list with the aim of expanding the tax base and breaking the ITC (pre-tax credit) chain to eliminate.
Under GST, a four-tier structure exempts a low tax rate of 5 percent or levies a low rate of 5 percent on essential items and levies the highest rate of 28 percent on automobiles and depreciated goods. The other tax brackets are 12 and 18 percent. In addition, a cess is imposed on the highest plate of 28 percent on luxury, deserving and sinful goods.
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