GST Council to Discuss Rate Rationalisation on September 9, Final Decision to Follow: FM Sitharaman

Finance Minister Nirmala Sitharaman announced on August 27 that the Goods and Services Tax (GST) Council is set to discuss rate rationalisation in its upcoming meeting on September 9. However, she clarified that a final decision on revising tax rates and slabs will be deferred to a later meeting.

In a press briefing held in New Delhi, Sitharaman stated, “The upcoming GST Council meeting will take up the issue of rate rationalisation. There will be a discussion on the issue. The Committee of officers will make a presentation on rate rationalisation.” Despite the initial discussion, the minister emphasized that any conclusive decisions regarding rate adjustments would be made in subsequent council sessions.

Among the topics to be addressed, the issue of compensation cess on luxury and sin goods is expected to be discussed either during the September 9 meeting or in future gatherings. The cess, which is levied on goods like luxury cars, tobacco, and aerated drinks, is a critical element of GST revenue, and any changes to it could have significant implications.

The discussion on rate rationalisation follows a recent meeting of the Group of Ministers (GoM) on the subject, chaired by Bihar Deputy Chief Minister Samrat Chaudhary. The GoM reportedly agreed on maintaining the existing GST slabs at 5%, 12%, 18%, and 28%, with the focus shifting towards minor adjustments rather than a complete overhaul.

The fitment committee, composed of tax officers, has been assigned the task of analysing the potential impacts of altering tax rates on specific items. Their findings will be presented to the GST Council for further deliberation. A source familiar with the discussions indicated that the committee would evaluate the potential revenue loss and other economic implications before making any recommendations.

In addition to rate rationalisation, the GST Council is also slated to discuss the possible exemption of health and life insurance premiums from the 18% GST levy. This topic, among others, will be on the agenda for the 54th meeting of the GST Council on September 9.

The outcome of these discussions could have significant implications for both businesses and consumers, as the GST structure continues to evolve to meet the needs of the Indian economy.