Change in GST structure? States panel could suggest single 15% GST levy

 







In what might come as a relief for many, the Goods and Services Tax slabs may be cut down to 15 per cent by merging the 12 per cent and 18 per cent slabs. The change in GST structure could be proposed by a panel of state ministers set up to suggest changes to the GST rate structure.
While the group of ministers (GoM), likely to meet this week to decide on the rates, is aiming to put forward its suggestion of a 15 per cent GST slab, it is wary of suggesting a hike in the threshold rate to 8 per cent, from 5 per cent.
The decision of the GoM will be reviewed by the GST Council, which is expected to meet early next month to consider the report and the revenue status of the states, Economic Times quoted people familiar with deliberations as saying.
The GoM was set up by the council at its September 2021 meeting in Lucknow.
Rate Structure
The GST has a four-tier structure having 5 per cent, 12 per cent, 18 per cent, and 28 per cent rates. Special rates are also levied on some goods like precious metals, making the regime complex. Meanwhile, when GST was announced in July 2017, the revenue-neutral rate was seen at about 15.5 per cent.
Revenue-neutral rate is the rate at which there is no loss of tax revenue for states or the Centre following the switch to GST. The rate has since come down to around 11.6 per cent because of exemptions and reductions in rates on many goods.
If the GST threshold rate is raised to 8 per cent from 5 per cent, it could generate an additional annual revenue of about Rs 1.5 lakh crore. However, owing to inflation, most GoM members opined that the present timing to tweak the GST rates may not be right. sources said.
Some members are in favour of the merger of the 12 per cent and 18 per cent slab into a common 15 per cent levy, together with increasing the cess on so-called sin goods.
"Most of the members agreed that a rate hike is imminent but were apprehensive of (the) timing," an official said.
Source:https://www.timesnownews.com/business-economy/industry/change-in-gst-structure-states-panel-could-suggest-single-15-gst-levy-article-90343609

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