Chief Minister Basavaraj Bommai, who is heading the Group of Ministers on Goods and Services Tax (GST), on Friday chaired a meeting on rate rationalisation and ways for revenue augmentation.
The GoM has to submit a report in a month. Discussions in the virtual meeting on Friday lasted for nearly four hours.
As on date, there are multiple rates comprising four mains — 5%, 12%, 18%, and 28% — and some special rates such as 0%, 0.25%, and 3%. There was a plan for long time to reduce the number of rates and one idea was to merge 12% and 18% and fix a consolidated rate of 15%. The GoM also discussed various combinations and tax rates on different raw materials, official sources said.
Union Minister Nirmala Sitharaman has suggested the GoM to recommend the rationalisation measures, including merger of tax rate slabs for evolving a simple tax structure. The GoM was constituted on September 24 and asked to submit its report in two months. The meeting was delayed as Mr. Bommai was busy in byelection campaign.
Next meeting
Sources said the GoM’s report would be ready before the next meeting of the GST Council to enable the council to hold discussions on the recommendations of the report and decide future course of action. The next GST Council meeting is likely to be held at the end of December.
Finance Ministers of different States, officials of the Union Finance Ministry, and officials of Finance Departments of various States attended the meeting on Friday and provided suggestion on rationalisation of tax structure. Mr. Bommai is expected to chair more meetings to evolve consensus on rate rationalisation, sources said.
