New Delhi: The Finance Ministry has set up two committees of state finance ministers which would rework rate slabs, review GST exempt items and identify potential evasion sources. Four years after the rollout of the national Goods and Services Tax (GST), which replaced the complex indirect tax structure, the centre and states have started work on moving towards a "simpler rate structure in GST" by reviewing the current rate slabs, including special rates and merger of rate slabs.
The Group of Ministers (GoM) on rate rationalisation would also review items under inverted duty structure to help minimise refund payout, and review the supply of goods and services exempt under GST with an objective to expand the tax base and eliminate breaking of input tax credit (ITC) chain.
The 7-member panel, which would submit a report in two months, would be headed by Karnataka Chief Minister Basavaraj Bommai and include West Bengal Finance Minister Amit Mitra, Kerala Finance Minister K N Balagopal, Bihar Deputy Chief Minister Tarkishore Prasad. The ministerial panel would look at representations of inverted duty structure and recommend suitable rates to eliminate any such cases where final goods attract a lower GST than the tax levied on its inputs.
The GoM on GST system reforms would identify potential sources of evasion and suggest changes in business processes and IT systems to plug revenue leakage. The 8-member panel, headed by Maharashtra Deputy Chief Minister Ajit Pawar, would include Delhi Deputy Chief Minister Manish Sisodia, Tamil Nadu Finance Minister Palanivel Thiaga Rajan and Chhattisgarh Finance Minister T S Singh Deo.