Insights from Reconstituted GoM and Future Expectations
The recent reconstitution of the Group of Ministers (GoM) tasked with GST rate rationalisation has raised expectations regarding possible developments in the next financial year, FY25. Despite the expected progress, there are currently no meetings scheduled, as revealed by sources close to the matter. India Refunds details the possibility of GST rate rationalisation in this blog.
In the absence of a post-reconstitution meeting, schedule the possibility of incorporating new members into partaking in the GST rate rationalisation task, after the Rajasthan Assembly elections, is being considered
What is GST Rate Rationalisation?
GST rate rationalisation refers to the reassessing of the Goods and Services Tax rates being levied. The objective is to optimise tax structures by making them more efficient, ensuring a balanced tax system and reducing complexity.
The GST Council reviews existing taxes, periodically, based on:
Economic conditions
Revenue collection
Industry requirements
Consumer needs
The GST rate rationalisation involves reclassifying goods and services into various tax rates or adjusting prevalent tax rates to obliterate discrepancies, reduce burden on certain sectors and foster economic growth.
You can also read and know more about the updated GST Acts and Rules - Bare Law, by the ICAI from India Refund’s blog.
The GST rate rationalisation involves reclassifying goods and services into various tax rates or adjusting prevalent tax rates to obliterate discrepancies, reduce burden on certain sectors and foster economic growth.
You can also read and know more about the updated GST Acts and Rules - Bare Law, by the ICAI from India Refund’s blog.
GST Rate Rationalisation - Process
Data Analysis and Consultation: The GST Council will review economic data and seek input from industry, experts and stakeholders.
Product/Service Identification: Products and services requiring rate adjustments are identified based on economic factors and industry needs.
Reviewing and determining tax rates: The council will discuss and decide on changes to tax rates and consider whether to move items between tax rates or change tax rates within the same tax rate.
Implementation and Communication: Changed fees will become effective as of the effective date. Communication is key to ensuring that stakeholders understand the changes.
Monitoring and further adjustments: After implementation, its effectiveness will be monitored. Further adjustments will be made based on revenue collection, industry response, and compliance levels.
The newly formed Government has prominent members such as Karnataka Finance Minister Krishna Byre Gowda and Uttar Pradesh Finance Minister Suresh Kumar Khanna as its chairpersons. Other members include ministers from Goa, Bihar, West Bengal and Kerala, who together form a seven-member team.
Although the exact trajectory remains uncertain, India Refunds believes that there are hopes that the GST rate rationalisaton debate will gain momentum in the new financial year and could lead to significant developments in the GST policy, during the Interim Budget, 2025 intended to happen on February 1.
Reach out to India Refunds, India’s first and only advisory firm dealing with issues related to tax refunds of Income Tax and GST, for all your refund requirements and other information.
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