GST Council sets up ministerial panels to look into rate rationalisation, systems review

 







Finance Ministry has set up a group of ministers to look into the rate rationalisation under the goods and services tax including the current slab structure.

The goods and services tax council secretariat Monday notified the setting up of two GoM, one to look into the rate structure and another to look at systems reforms required to plug revenue leakages. The GST Council had decided to set up the two GoMs in its meeting earlier this month.

The seven-member panel, which will be headed by Karnataka Chief Minister Basavaraj Bommai and includes West Bengal Finance Minister Amit Mitra, Kerala Finance Minister K N Balagopal, and others would review the supply of goods and services exempt under GST with an objective to expand the tax base and eliminate breaking of ITC chain.

It would also review the current tax slab rates and recommend changes in the same.

The Group of Ministers (GoM) on rate rationalisation would also review items under inverted duty structure to help minimise refund payout, and review the supply of goods and services exempt under GST with an objective to expand the tax base and eliminate breaking of input tax credit (ITC) chain.

The current GST has as many as seven rates – exempt, 0.25%, 3%, 5%, 12%, 18% and 28%. The 15th Finance Commission had also recommended the GST rate structure revamp its report.

The GoM has been given two months to submit its report of short, medium and long term recommendations. The panel may submit an interim report for such immediate measures as it may deem fit.

It would also look at measures needed to eliminate breaking of input tax credit, special rates and rationalisation and review inverted duty structure.

Apart from that, the finance ministry also constituted another GoM on GST system reforms to identify potential sources of evasion and suggest changes in business processes and IT systems to plug revenue leakage.

The eight-member panel, headed by Maharashtra Deputy Chief Minister Ajit Pawar, would include Delhi Deputy Chief Minister Manish Sisodia, Tamil Nadu Finance Minister Palanivel Thiaga Rajan and Chhattisgarh Finance Minister T S Singh Deo.

The panel, which would give its recommendation to the council from time to time, would review IT tools and interface available with taxmen and suggest ways to make them more effective, identify possible use of data analysis towards better tax compliance and suggest ways of better coordination between central and state tax officers.

The decision to set up these two GoMs was taken by the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, on September 17.


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