Ministers tasked to look into rate rationalisation likely to meet early next month

A group of ministers tasked by the Goods and Services Tax Council to look into rate rationalisation is likely to meet early next month.

The seven member GoM is led by Karnataka chief minister Basavaraj S. Bommai and has finance ministers from West Bengal, Kerala Goa, Bihar, Uttar Pradesh and Rajasthan as members. The group is unlikely to take up a proposal to raise the lowest or threshold slab under GST to 8% from 5% now, government sources said.

The recommendations of the GoM would be placed before the GST Council, likely to meet in May second half, which will take the final call.


Policymakers now see rising inflation as a serious concern and any rate change exercise will take this factor into consideration. Any rejig in the rates would now be carried out keeping in view these concerns, though the final decision would rest with the GST Council.

The council had set up the GoM on rate rationalisation at its September 2021 meeting in Lucknow. The group was asked to review the exempt goods to expand the tax base, suggest changes to simplify the rate structure, and garner the required resources. The GoM has just met once since its inception to deliberate on the proposed changes to the rate structure.

A detailed presentation was made before the Council on changes to the rate structure and its implication for revenues and those suggestions are available with the GoM. These scenarios included raising the threshold slab rate to 8% from 5%, a single 15% levy by merging the 12% and 18% slabs.

The GST has a four-tier structure, consisting of 5%, 12%, 18%, and 28% rates. Additionally, there are special rates for some goods such as precious metals, making the regime complex.