No Pending GoM Report on GST Rate Rationalisation: Finance Ministry Clarifies
On December 9, 2024, the Finance Ministry clarified that the Group of Ministers (GoM) on rate rationalisation has not submitted any pending report to the GST Council. Minister of State for Finance, Pankaj Chaudhary, addressed Parliament to dismiss speculation about imminent GST rate cuts.
Background
Formation of the GoM
The GST Council created the GoM on rate rationalisation during its 45th meeting on September 17, 2021. The group’s mandate includes reviewing and rationalising GST rates for goods and services.
CBIC’s Clarification
Last week, the Central Board of Indirect Taxes and Customs (CBIC) clarified that the GoM had not submitted recommendations. The GST Council, chaired by the Union Finance Minister with state representatives, has not discussed rate changes.
Media Speculation
Recent reports suggested that the GoM had proposed:
- Raising the tax rate on sin goods, such as aerated beverages and tobacco products, from 28% to 35%.
- Reducing tax rates on select items from 12% to 5%.
The Finance Ministry denied these claims, emphasizing that no proposals from the GoM have reached the GST Council.
Upcoming GST Council Meeting
The next GST Council meeting is scheduled for December 21, 2024. While rate changes may be discussed, only the GST Council has the authority to decide on modifications.
Key Takeaways
- The GoM functions as a recommendatory body. It has not submitted or proposed any changes for GST rates.
- Both the Finance Ministry and CBIC have dismissed media reports as speculative.
Stakeholders are now focusing on the upcoming GST Council meeting for concrete updates on tax rates.
