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Informist, Thursday, Aug 22, 2024

 

NEW DELHI – The ministerial panel tasked with assessing rate rationalisation today discussed tinkering with the goods and services tax slabs, something that has been pending for a while now. While talks of reducing the number of GST slabs from four to three had gathered steam, ministers today broadly hinted at continuing the four-slab structure. The GST is applicable in four tax slabs now--5%, 12%, 18%, and 28%. In the meeting held at the finance ministry today, the panel also asked tax officers to analyse the implications of tweaking GST rates on some items and present them before the GST Council.

 

The issue of levying GST on health and life insurance products was also raised by some states in the meeting of the Group of Ministers on rate rationalisation and was referred to the fitment committee, comprising central and state tax officers, for further data analysis. These suggestions and reports will be taken up by the GST Council, which will hold the 54th meeting in the national capital on Sep 9. 

 

While speaking to the media after the first rate rationalisation panel meeting under his convenorship, Bihar Deputy Chief Minister Samrat Chaudhary said, "Some GoM (Group of Ministers) members are demanding that there should be no change in tax slabs under GST". 

 

"More discussions will happen and only then final decision will be taken," Chaudhary said, adding the panel has received representations from restaurants, beverages, and online gaming sectors, which will be reviewed and some of them will be sent to the fitment committee.

 

West Bengal Finance Minister Chandrima Bhattacharya said, "I have said there should be no changes in the GST slab. A presentation will be made before the Council". The next rate rationalisation panel meeting will be held after the Council meeting, she added. 

 

Bhattacharya also said that reduction of the number of GST slabs will not happen for now. "Slabs will be retained at 5, 12, 18, and 28%. This will be reviewed by the Council now".

               

On the same issue, Karnataka Revenue Minister Krishna Byre Gowda said that GST as a tax structure has broadly stabilised, and it would not make sense to "disturb" it now.

 

The issue of withdrawal of the 18% GST on health insurance premiums has also become a bone of contention for the Council as it saw multiple rounds of protests and debates during the Monsoon Session of Parliament. This issue came to the fore after a letter to Finance Minister Nirmala Sitharaman from Road Transport and Highways Minister Nitin Gadkari was leaked into the public domain that sought withdrawal of GST on insurance premiums. Gadkari wrote that the levy amounts to taxing the uncertainties of life and restricts growth of the sector.

 

Replying to the protests, Sitharaman had suggested the Opposition bring the proposal to the GST Council through state finance ministers. She slammed the Opposition for politicising the issue in Parliament and asked if the members had written to the finance ministers of Opposition-ruled states to withdraw the tax. Sitharaman had also said that the matter was discussed thrice in the GST Council meeting. The council discussed the matter at its 31st meeting, 37th meeting, and 47th meeting.

 

On this Byre Gowda said, "We have asked for further report (from the fitment committee) on 18% GST on insurance premiums. We are not sure if it's part of the (GST Council) agenda". 

 

The other members on the rate rationalisation panel are Kerala Finance Minister K.N. Balagopal, Uttar Pradesh Finance Minister Suresh Kumar Khanna, Goa Transport Minister Mauvin Godinho, and Rajasthan Medical, and Health Services Minister Gajendra Singh.

 

The GST Council, in its previous meeting in June, had tasked the rate rationalisation panel to give a broad overview of the work done or a draft report on GST rate rationalisation. It would include the status of the work, aspects covered by the panel so far and work pending before the panel. The upcoming Council will likely take up this report. The rate rationalisation panel is looking at correcting inverted duty structures, suggesting tax changes, and pruning of the exemption list.  End

 

Reported by Priyasmita Dutta

Edited by Deepshikha Bhardwaj

 

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