look news india
Informed sources say the committee under GST, which comprises officials from the Centre and states, after examining the possibility of relaxation in rates of some items, has reconsidered the process of relaxing GST rates in the 12 per cent slab, which would make it a revenue-neutral process.
A new GST structure with three slabs instead of four may be made mandatory during the current financial year 2025. In the current structure, the GST interest rate slabs are 5 per cent, 12 per cent and 18 per cent and a maximum of 28 per cent. Also, zero percent and special rates apply on some goods and services.
In this regard, the committee held a meeting to review the implementation of the new GST rates and its possible impacts, which will report its findings to the Group of Ministers to suggest changes in GST rates. The Revenue Department hopes to implement the new GST framework rates in 2025. “Our priority is to ease some anomalies in the current GST rate structure,” an official said. GST rate relaxation will be considered in a meeting to be held after the budget is presented in July. Slab relaxation was considered after GST revenue crossed Rs 2 trillion last April. This revenue is expected to reach Rs 1.7 to Rs 1.8 trillion per month during the next year.
Given that goods can move from one slab to another after GST exemption, this operation needs deep consideration, officials said. The panel of state ministers to consider GST exemption includes finance ministers of Goa, Kerala, Karnataka, East Bengal, Rajasthan and Bihar, headed by Uttar Pradesh Finance Minister Suresh Khanna. The committee recommended this last November. The committee, headed by former Karnataka Chief Minister and Finance Minister Basavaraj Bommai, submitted its interim report in June-2022 and sought more time for the final recommendation.
After the change in the state government in Bihar, now former Finance Minister of Bihar Vijay Kumar Choudhary is also being taken in his place in this panel.
Currently, around 1200 goods and services are under GST. Apart from the standard rates, special rates like 0.25%, 1.5%, 3% are also applicable.
While zero percent GST is applicable on some goods, most of the revenue comes through the 18 percent slab. The 28 percent slab generates 16 percent of the total GST revenue. The rest of the revenue comes from the 5 percent and 12 percent slabs. Experts say, this is an effective structure for revenue generation. Simplifying the structure will reduce disputes in GST rates. Some experts say that reducing GST on consumer goods will be beneficial and objections to GST in industries will also be reduced.
GST structure and proposed changes in it
The current rates in the GST framework are 5%, 12%, 18%, 28%
Some special rates are 0.25 percent, 1.5 percent and 3 percent
Exemption of certain items from GST means 0% GST
A meeting was held to seek suggestions for relaxing GST rates
Panel suggesting changes in GST rates will give its recommendations to Cabinet
GST Council will be reconstituted after the budget is presented in July
At present, a panel has been formed under the chairmanship of the Finance Minister of Uttar Pradesh.
