New Delhi, May 24 (SocialNews.XYZ) With a focus on simplifying the indirect tax regime and addressing anomalies in the existing Goods and Services Tax (GST) rate structure, the GST Council is likely to take up rate rationalisation and the future of compensation cess in its next meeting.
The meeting in New Delhi is anticipated to be convened soon, with states also pushing for clarity on their revenue outlook ahead of the next fiscal planning cycle.
According to a report by NDTV Profit, citing sources, the issue of compensation cess — a levy initially introduced to offset revenue losses of states post-GST rollout — is also on the table, especially as its continuation beyond 2026 becomes a point of debate.
Union Finance Minister Nirmala Sitharaman in March said that GST rates will be reduced further as the process of rationalising tax slabs is nearing completion. The revenue neutral rate (RNR), which was 15.8 per cent when GST was introduced in July 2017, has now come down to 11.4 per cent in 2023 and will decrease further.
FM Sitharaman said that the work on simplifying GST slabs is almost finished and the GST Council, which is led by Finance Minister and includes state finance ministers, is expected to take a final decision soon.
The Group of Minister (GoM) was set up in September 2021 to suggest changes in GST rates and slabs. This committee consists of finance ministers from six states and has been working on making the tax system more efficient. The rationalisation process includes reducing the number of tax slabs, streamlining rates, and addressing key concerns raised by different industries.
The Union Minister further emphasised that a final review is underway before presenting the proposal at the next GST Council meeting.
The gross GST collections for April stood at Rs 2.36 lakh crore, marking a 12.6 per cent increase over the gross collection of Rs 2.10 lakh crore in April 2024. The record GST collection in April showcases the resilience of the Indian economy and the effectiveness of cooperative federalism.
Source: IANS
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