Panel on rejigging GST rates due for another revamp, to meet before Budget

Council likely to meet by end of this month or first week of July

The Goods and Services Tax (GST) council, at its meeting before the full Budget for 2024-25 (FY25), is expected to once again change the composition of the group of ministers on rate rationalisation. The group has to submit a final report on rationalisation of the GST regime, following up on its interim report of June 2022.

The meeting will be held at a time when the council is expected to assess states’ progress in implementing changes to their laws on taxation of online gaming, levying 28 per cent GST on the full face value for online money gaming, casinos, and horseracing. The six-month review window ended on March 30.

The council, the all-powerful body governing the GST regime and which is headed by Finance Minister Nirmala Sitharaman, is expected to meet before the Budget is presented in the middle of July.

The group of ministers on rate rationalisation is headed by Uttar Pradesh Finance Minister Suresh Khanna and includes the finance ministers of Goa, Kerala, Karnataka, West Bengal, Rajasthan and Bihar. It was first formed in 2021 at the GST Council’s meeting to look into rationalisation of rates and address the so-called inverted duty structure.

It was reconstituted in November, when its head, Basavaraj S Bommai, lost the Karnataka Assembly elections. It needs another change because one of its members, Vijay Kumar Chaudhary, is no longer the finance minister of Bihar.

Meanwhile, top sources say the GST Council’s fitment committee, which consists of Central and state officials, has begun the rate rationalisation exercise afresh, examining the possibility of dropping some of the rates, particularly the 12 per cent slab, to achieve a revenue-neutral structure. The GST regime could see an overhaul in FY25, with a switch to a three-slab structure from the existing four, according to a senior official with direct knowledge of the matter.

The group of ministers on rate rationalisation is expected to submit its recommendations and make a final report in three to four months. The current rate structure consists of the standard rates of 5 per cent, 12 per cent, 18 per cent, and the highest of 28 per cent.