The Chief Minister of Karnataka entrusted the task of reorganization, merger of several slabs.
Setting the stage for an overhaul of multiple tax rates under the Goods and Services Tax regime, the government has asked a Group of Ministers (GoM) led by Karnataka Chief Minister Basavaraj S Bommai to propose rationalization of tax rates and consider mergers. assigned the task. Different tax slabs within two months.
Currently, the GST regime has five broad tax rate slabs of zero, 5%, 12%, 18% and 28%, cess over 28% on some items and special rates for items like precious stones and diamonds. .
While Finance Minister Nirmala Sitharaman, on September 17, announced the GST Council’s decision to set up two GoMs to raise revenue, she had said at that time that a panel would only look into the issues of tax rate rationalization to correct discrepancies. no tax slab Actually. Ms Sitharaman had indicated that the effective tax rate under GST had come down from the original revenue neutral rate of 15.5 per cent to 11.6% due to several rate cuts since the implementation of GST in July 2017.
Mr Bommai’s seven-member group constituted by the finance ministry on Friday includes West Bengal Finance Minister Amit Mitra and Kerala Finance Minister KN Balagopal as well as members of the GST Council from Goa, Bihar, Uttar Pradesh and Rajasthan. The group has been asked to suggest immediate changes as well as a roadmap for short and medium term changes in the GST rate structure.
“The GoM will review the existing tax slab rates and recommend changes needed to capture the necessary resources (and) review the existing rate slab structure of GST, including special rates, and recommend rationalization measures, including merging of tax rates. Slabs required for a simpler rate structure in GST,” stated the terms of reference for the GoM.
Maharashtra Deputy CM Ajit Pawar has been made the convener of another GoM on GST System Reforms, which will harness IT tools to reduce tax evasion and ease compliance for taxpayers. The ministry said the group would overlap the two existing ministerial groups in its mandate on IT challenges and revenue mobilization.
The GoM includes seven other ministers, including Tamil Nadu Finance Minister Palanivel Thiaga Rajan, Haryana and Delhi Deputy CMs Dushyant Chautala and Manish Sisodia, along with ministers representing Andhra Pradesh, Odisha, Chhattisgarh and Assam on the council.
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