The Goods and Services Tax (GST) Council is learnt to have accepted an interim report on the rationalisation of tax rates submitted by a group of ministers (GoM) led by Karnataka Chief Minister Basavaraj S. Bommai on the first day of its two-day meeting on Tuesday.
Finance and Corporate Affairs Minister Nirmala Sitharaman chaired the proceedings of the Council, convened for the first time in 2022, and will announce the outcomes on Wednesday. Several key decisions are expected, the Finance Ministry said in a statement.
While the GoM was also tasked with considering the merger of the several different tax slabs, a larger overhaul has been put off in view of concerns about high inflation. For now, the panel has mooted dropping exemptions on some items and tweaking rates for goods and services plagued by an inverted duty structure.
With the GST regime completing five years, marking the sunset of the Centre’s promise of assured revenue levels for States, some Opposition-ruled States urged an extension of the compensation period for another five years. Alternatively, they have mooted an increase in their share of GST revenue.
Chhattisgarh Commercial Tax Minister T.S. Singh Deo said this was particularly vital for manufacturing and mining States which were not large consumers.
“If the protective revenue provision is not continued, then the 50% formula for Central GST and State GST should be changed to SGST 80%-70% and CGST 20%-30%,” he suggested.