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Informist, Wednesday, Jul. 2, 2025

 

NEW DELHI – The Group of Ministers tasked to analyse goods and services tax revenue will likely hold a meeting on Friday, two people aware of the development said. The ministerial panel, headed by Chief Minister of Goa Pramod P. Sawant, will hold the meeting in Delhi from 1130 IST.

 

Formed in pursuance of the decision taken in 31st GST Council meeting held on Dec. 22, 2018, this Group of Ministers analyse state-wise trends of revenue collection, both pre-GST and post-GST, analyse structural patterns emerging out of certain major sectors of economy affecting the revenue collection, including the services sector, identify underlying reasons for deviations in revenue collection trends from the original assumption arrived at during design and implementation of GST, and suggest suitable measures or policy intervention for course correction to augment revenues.

 

Presently, it is a nine-member committee with representation from Bihar, Maharashtra, Telangana, Andhra Pradesh, Chhattisgarh, Gujarat, Punjab, and Tamil Nadu, besides Goa. This meeting will also be the first of any Group of Ministers after the GST Council last met on Dec. 21.

 

The meeting assumes significance against the backdrop of worries of likely slowdown in momentum of GST collections. GST collections grew 6.2% on year to INR 1.85 trillion in June, data released by the government Tuesday showed. At 6.2%, the on-year growth in GST collections in June was at the slowest pace in four years. The post-settlement revenues of states rose only 4.6% on year to INR 1.389 trillion in June. 

 

Additionally, the average GST rate for the financial year 2023-24 (Apr-Mar) was 11.64%, much lower than the revenue neutral rate of 15.0%-15.5% assumed at the time of introduction of the GST regime, Finance Minister Nirmala Sitharaman had said on Dec. 2, in a written reply in the Lok Sabha. A committee headed by the then chief economic adviser Arvind Subramanian had suggested a revenue neutral rate of 15.0-15.5%.

 

GST slabs may have to be rationalised to augment additional revenue for states, as several of them have revenue deficits despite being provided grants to eliminate such deficits, PRS Legislative Research had said in a report titled 'State Of State Finances' last year. Currently, the GST structure has four rate slabs--5%, 12%, 18% and 28%.

 

Over the years, the GST Council has reduced rates on several items, especially before the 2019 General Elections, which led to the average rate falling below the revenue neutral rate.

 

The meeting has also been called at a time when three major changes to the GST structure are at bay – rate changes on a host of items, rationalisation of GST tax slabs, and determining the future of compensation cess. Sawant-led Group of Ministers will eventually have to analyse trends and provide policy solutions should there be any adverse revenue implication from the above changes.

 

Sitharaman is expected to chair the next GST Council meeting this month, and likely take up the issue of rate rationalisation and simplification of the tax structure. The council, which has the mandate to meet every three months, has not met for over six months.  End

 

Reported by Priyasmita Dutta

Edited by Ashish Shirke

 

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