Inflation delays GST rates rationalisation, Centre counters states
India Today
Sources feel that the clock is ticking for the GST council and a meeting can't be delayed beyond the start of the monsoon session of Parliament which usually is held in the third week of July.
First the Covid, then the ongoing Russia-Ukraine war. The global dislocations caused by the two are not only causing shortages, driving prices of staples but also delaying an impending rejig of taxes consumers pay for goods and services. With external factors dictating shortages and inflation, the Goods and Service Tax (GST) rate rationalisation aimed at improving tax collections hangs fire as both the centre and states do not want to hike taxes at a time when prices are on the boil.
Worse, a meeting of the GST council, the supreme decision making body on indirect taxes is long overdue. The last meeting was held in September 2021 in Lucknow.
Sources feel that the clock is ticking for the GST council and a meeting can't be delayed beyond the start of the monsoon session of Parliament which usually is held in the third week of July. "A GST council meeting in the second part of June can't be ruled out," said a source.
But another official added that a meeting may be held prior to the Parliament session but there are slim chances of levy on large number of items being raised before the crucial assembly elections at the end of the year in Gujarat and Himachal Pradesh later this year.
In its September, 2021 meeting, the council put in place a Group of State Finance Ministers (GoSFM) to look into the possibility of rationalisation of commodities and services under different tax slabs.
The key task of the group was to examine the wholesale and sharp reduction in GST on most commodities and services in the council meet in November 2017 in Guwahati.
The GST council then led by finance minister, late Arun Jaitley had kept just 50 items in the highest tax rate of 28 per cent. The Council decided to reduce the tax rate on 178 of the 228 items from 28 per cent to 18 per cent, with effect from November 15, 2017.
