From Our Bureau
NEW DELHI: A 7-member Group of Ministers (GoM) set up by the GST Council to review the tax rates has not taken up a proposal to raise the lowest threshold slab from 5% to 8%.
A finance ministry source said the proposed increase as such may not figure in the GoM meeting expected to meet early next month. The GOM is headed by Karnataka chief minister Basavaraj S Bommai with the finance ministers of Goa, Rajasthan, West Bengal, Kerala, Bihar and Uttar Pradesh as its members.
The Congress and other opposition parties had on Monday expressed concern over a report that the Centre was pushing for reducing GST on some items to 3% and on other items to 8% which may lead to cascading effect on the prices of items used by the poor and the middle class.
The GoM recommendations go to the GST council headed by finance minister Nirmala Sitharaman for a final decision. No dates are fixed for the GST council meeting, but it is likely to meet in the second half of May.
With the inflation rate spiking in recent months, policymakers will take a hard look at any change in GST rates lest it fuels price rise, the source said. The GST has a four-tier structure, consisting of 5%, 12%, 18% and 28% rates.
The GST Council — the highest decision-making body that was set up after more than a dozen central and state taxes such as excise duty and VAT was subsumed into a uniform nationwide levy — had set up the GoM on rate rationalisation at its September 2021 meeting in Lucknow. The group was asked to review the exempt goods to expand the tax base, suggest changes to simplify the rate structure and garner the required resources.
