New Delhi, Feb 3 (PTI) – Finance Secretary Tuhin Kanta Pandey has emphasized the need for rationalising Goods and Services Tax (GST) rates, stating that enough experience has been gained since its implementation in 2017. Speaking at a FICCI post-budget meeting on Monday, Pandey highlighted that the restructuring of tax slabs requires extensive consultation with states through the GST Council.
The GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising state finance ministers, had previously formed a Group of Ministers (GoM) to propose revisions to GST rates and streamline tax slabs. However, the much-anticipated report on rate restructuring remains pending, as the GoM was expected to submit its findings in the Council’s December meeting but failed to do so.
Pandey, who also serves as Revenue Secretary, noted that GST has introduced transparency in taxation and that the focus must now be on refining its structure. "Now that we have gained experience with GST implementation, it is crucial to assess the way forward. The exercise requires deeper consultation with states within the Council," he said.
Emphasizing that rate rationalisation is an ongoing process, he acknowledged the necessity of adjustments but indicated that specifics would be determined by the GoM. "There is a clear recognition that rationalisation is needed. However, how this will be structured, what the new rates will be, and how the slabs will be revised are details that the GoM will work out," he added.
Currently, GST is structured into four tax slabs—5%, 12%, 18%, and 28%. While essential goods and packed food items fall under the lowest 5% slab, luxury and demerit goods attract the highest tax rate of 28%. The move to rationalise these slabs is expected to simplify the tax structure and address anomalies in the current system.
The industry now awaits further deliberations by the GoM and the GST Council for clarity on potential changes to tax rates and slabs.
The GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising state finance ministers, had previously formed a Group of Ministers (GoM) to propose revisions to GST rates and streamline tax slabs. However, the much-anticipated report on rate restructuring remains pending, as the GoM was expected to submit its findings in the Council’s December meeting but failed to do so.
Pandey, who also serves as Revenue Secretary, noted that GST has introduced transparency in taxation and that the focus must now be on refining its structure. "Now that we have gained experience with GST implementation, it is crucial to assess the way forward. The exercise requires deeper consultation with states within the Council," he said.
Emphasizing that rate rationalisation is an ongoing process, he acknowledged the necessity of adjustments but indicated that specifics would be determined by the GoM. "There is a clear recognition that rationalisation is needed. However, how this will be structured, what the new rates will be, and how the slabs will be revised are details that the GoM will work out," he added.
Currently, GST is structured into four tax slabs—5%, 12%, 18%, and 28%. While essential goods and packed food items fall under the lowest 5% slab, luxury and demerit goods attract the highest tax rate of 28%. The move to rationalise these slabs is expected to simplify the tax structure and address anomalies in the current system.
The industry now awaits further deliberations by the GoM and the GST Council for clarity on potential changes to tax rates and slabs.
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