GST Council to meet on September 9, rate rationalisation talks likely to be on table
- The 54th Meeting of the GST Council will be held on 9th September, 2024 at New Delhi
Highlights:
- Rate rationalisation, covering the future course for tax slabs and correction of inverted duty structure, under the Goods and Services Tax (GST) regime are likely to be discussed in the GST Council meeting to be held next month.
- There is the unfinished agenda of rate rationalisation.
- A move towards it would require initial steps in the form of discussions within the ministerial committee.
- The committee would be asked to present the work done so far for a wide ranging discussion in the Council.
- It also needs to be looked into whether a timeline has to be fixed for the ministerial committee to submit its recommendations on rate rationalisation and changes in the slabs
- The Council is also expected to take up the notices being sent to companies, especially for their overseas operations even after having issued a clarificatory circular earlier.
- The overall GST rate rationalisation and streamlining of the slab structure, which falls into four broad categories of 5 per cent, 12 per cent, 18 per cent and 28 per cent, has been a long pending issue.
- In September 2021, the GST Council had set up a GoM to examine rate rationalisation. The committee had submitted an interim report in June 2022.
- While there have been internal discussions about merger of slabs or creation of a new slab in between 12 per cent and 18 per cent, the concerns have centred around whether it would create any revenue losses for the states and the Centre.
- The concern of maintaining revenue neutrality has weighed on such discussions earlier.
- Rate rationalisation is a crucial step towards simplifying India’s GST regime
- Prioritising sunrise sectors, such as new energy, is essential to drive down final product prices, including those in business-to-business transactions.
- Additionally, addressing classification ambiguities is vital during this exercise. Wide-ranging industry consultations before implementing new rates will help align stakeholder expectations and facilitate a smooth transition.
Prelims Takeaway
- GST council