GST rate rejig off the table for now

livemint.com:

NEW DELHI : A proposed revision of goods and services tax (GST) rates, aimed at boosting revenue collections and fixing tax anomalies, is unlikely before the 2024 general elections, as the recent meeting of the GST Council did not reconstitute the key ministerial group responsible for examining the matter. During the meeting, the Council did not name a replacement for former Karnataka chief minister Basavaraj Bommai, who served as the convenor of the ministerial group established in September 2021 to restructure GST.

The group’s mandate was to review tax exemptions to expand the number of taxpayers and recommend changes to tax rates and slabs to raise revenue collection, simplify the tax structure, and reduce tax refunds from the government owing to anomalies in the existing structure. Following the change in government in Karnataka, with the Congress’s Siddaramaiah replacing Bommai as chief minister, a fresh appointment for the convenor of the ministerial group became necessary.

The federal indirect tax body now has to look for a state minister who is committed to delivering reports in a timely manner for the tax rate revision exercise, two people familiar with the discussions in the Council said, adding that the Bommai committee had submitted two reports. “First of all, we have to find a convenor for the GoM, who is equally focused as the earlier convenor… The other point is that revenue collection is doing well," said one of the two people, highlighting that the concerns around the revenue impact of successive tax rate cuts under the GST regime are becoming less worrisome.

That would mean the need for a tax rate increase is less pressing now than earlier. The Reserve Bank of India (RBI) had in 2019 estimated that due