The Goods and Services Tax Council's Group of Ministers (GoM), responsible for rate rationalization, is expected to undergo reconstitution soon, welcoming Karnataka Revenue Minister Krishna Byre Gowda as a new member.
Following a change in government in Karnataka, the position of convenor has remained vacant. Previously, former Karnataka chief minister Basavaraj Bommai held the role of convenor within the seven-member committee. The appointment of a new convenor will be decided once the GoM is reconstituted.
However, it is unlikely that a significant restructuring of the GST rate system will occur prior to the 2024 general elections. A senior official stated, "The GoM is undergoing reconstitution. The process of rate rationalization will be reviewed only after that."
Reevaluating the entire GST structure is a time-consuming process that may require additional time, according to sources.
Formed in September 2021, the seven-member GoM includes representatives from Bihar, Goa, Kerala, and other states. Their primary objective is to simplify the tax structure, address the inverted duty structure, and resolve classification-related disputes by rationalizing GST rates.
Currently, the GST regime encompasses five broad rates: zero, 5%, 12%, 18%, and 28%, along with a cess imposed on specified luxury and demerit goods, exceeding the highest rate.
In June 2022, the GoM submitted an interim report suggesting revisions in tax rates for certain goods and services to streamline the levy.
However, the fitment committee of the GST Council is still reviewing the proposal regarding the taxation of millets, as it could potentially impact the taxation of other millet-based products. The Council is considering reducing the GST rate on millet-based mixes from the current 12% or 18% to either zero or 5%.
Additionally, the fitment committee is examining the GST rate for sedans of a specific size, which might be addressed in the upcoming meeting of the GST Council. The discussion arose during deliberations on the compensation cess applicable to multi-utility vehicles.
Officials have clarified that there are no immediate plans to review the GST rate on cement. However, the industry has requested a reduction in the 28% GST rate, emphasizing its significance for infrastructure projects.
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