GoM on Rate Rationalisation Rejects GST Slab Merger
By: Admin | August 22, 2024 | Categories: GST News | 4 Min Read
The Goods and Services Tax (GST) Group of Ministers (GoM), chaired by Bihar Deputy Chief Minister Samrat Chaudhary, has decided against merging GST slabs. The GoM prefers to keep the current four GST rates.
Meeting Highlights
On August 22, the GoM held its first meeting. The members include:
- Uttar Pradesh Finance Minister Suresh Kumar Khanna
- Goa Transport Minister Mauvin Godinho
- Rajasthan Medical and Health Services Minister Gajendra Singh
- West Bengal Finance Minister Chandrima Bhattacharya
- Karnataka Revenue Minister Krishna Byre Gowda
- Kerala Finance Minister K N Balagopal
During the meeting, the GoM members agreed not to change the GST slabs. They support retaining the four existing rates.
Next Steps and Future Meetings
The GoM meeting took place ahead of the GST Council’s session scheduled for September 9. The Council will review the GoM’s report, which will be submitted soon. Expect the next GoM meeting to occur around September 23-25.
Current GST Rates
Currently, essential and semi-essential goods, which make up 70-80 percent of India’s consumption, are taxed at either 5 percent or 12 percent. In comparison, sin goods and luxury items face a 28 percent tax rate, which significantly boosts government revenue.
Background on the GoM
The government reconstituted the GST rate rationalisation GoM on November 1, 2023. Initially, the plan aimed to consolidate the four existing rates (5 percent, 12 percent, 18 percent, and 28 percent) into three. This would involve merging two of the current slabs—either combining the 5 percent and 12 percent rates into an 8 percent rate or merging the 12 percent and 18 percent rates into a 15 percent rate.
The GST Council formed the GoM during its 45th meeting on September 17, 2021, to address rate rationalisation and correct the inverted duty structure. Originally led by Basavaraj S Bommai, the GoM was reconstituted after his defeat in the state assembly elections.
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