The Group of Ministers (GoM) on GST rate rationalisation has discussed tax rate tweaks on over 100 items, including lowering taxes on certain goods from 12% to 5%, to give relief to the common man, West Bengal Finance Minister Chandrima Bhattacharya said on Thursday, September 26, 2024.
The next meeting of the GoM is scheduled on October 20, Ms. Bhattacharya said, adding that rationalising taxes on bicycles and bottled water will be part of the discussion.
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The six-member Group of Ministers (GoM), which had met on Wednesday (September 25), also took up the issue of tax rate cut on medical and pharma-related items in the 12% slab and decided to discuss it in its meeting next month.
To make good the revenue loss that will be incurred on account of lowering the tax rate on such items, the GoM also discussed the possibility of raising tax rates on some items, including aerated water and beverages, from the current 28 per cent GST, plus cess.
Currently, goods and services tax (GST) is a four-tier tax structure with slabs at 5%, 12%, 18%, and 28%. However, as per GST law, tax of up to 40% can be imposed on goods and services.
“The average tax rate under GST has fallen to 11.56% in 2024. West Bengal has suggested that the decision taken at the 23rd meeting of the GST Council in which tax rates were slashed on 178 items by pruning the 28% slab should be revisited. This would help to garner more revenues while at the same time give relief to common man by bringing items down to 5%,” Mr. Bhattacharya said.
The GoM would further deliberate on the views of its members in the October 20 meeting and place its recommendations before the GST Council, which is chaired by the Union Finance Minister and comprises Ministers from all States and UTs.
She said items used by the common man should attract lower tax rates and moving food items from 12% to 5% slab would bring relief for them in terms of reduction in prices.
However, some items in the 18% slab like hair dryers, hair curlers, and beauty or make up preparations could be reverted back to the 28% slab.
“There was no discussion on pruning the slabs. The GoM had consensus that common man should get relief and it also converged that if tax rates are reduced on items for common man, then it should also look at means to make up for the lost revenue,” Bhattacharya said, adding that states cannot bear any reduction in GST revenue at this point of time.
On taxing bicycles, the West Bengal Finance Minister said it is an item used by the common man, while there are high-end products, too. “We will have to look at reducing the tax rate for those bicycles used by the masses. The GoM will further deliberate on it,” she said.
Currently, bicycles and its parts and accessories attract 12% GST, while e-cycles attract 5% tax.
The six-member GoM also includes Uttar Pradesh Finance Minister Suresh Kumar Khanna, Rajasthan Health Services Minister Gajendra Singh, Karnataka Revenue Minister Krishna Byre Gowda, and Kerala Finance Minister K N Balagopal.
Published – September 26, 2024 02:06 pm IST