The ministerial panel on GST rationalisation has discussed proposals to rework the rates on over 100 items, apart from merger of the 12% and 18% slabs, but has opted to analyse it in detail, before finalising its recommendations.
West Bengal FM Chandrima Bhattacharya said the rates will be looked into by the fitment committee, comprising officers. “There would be a reduction in rates for some items, which are used by common people. Similarly, there would be a hike in rates for some luxury items,” she said, adding that the revenue implications would have to be weighed. At a meeting of the group of ministers led by Bihar deputy CM Samrat chaudhary in Goa, there was discussion on tweaking rates on food products, agriculture goods, fertiliser, stationery and other items. The discussions included lowering of taxes on certain goods from 12% to 5%.
The GoM is now likely to meet in Delhi in second half of Oct. The meeting will discuss rationalisation of taxes on bicycles and bottled water, among other things, Bhattacharya said. Some of the Opposition-ruled states, including West Bengal and Karnataka, are in favour of a status quo on retaining the four slabs of 5%, 12%, 18% and 28%. Multiple slabs are seen to be at the heart of complexity of the tariff structure, often making life difficult for consumers and sellers, who also have to tackle different interpretations across states.
The GoM’s decision will be the basis for discussions by the GST Council, led by FM Nirmala Sitharaman, who often faces flak for decisions that are unanimously taken by the Centre and the states. In the absence of a compensation structure, states are now reluctant to lower tax rates. A three-slab structure, if it goes through amid growing public pressure, will be a major change in the seven-year-old GST regime. But given high profile assembly elections in the coming months, including in Maharashtra, Delhi and Jharkhand, the GST Council may evolve a consensus on deferring a decision until early next year.
