Govt likely to rationalise GST slabs, correct dut y structure

GST RATES MAY NOT COME DOWN IN NEXT FISCAL: FINMIN

The CO VID-19 pandemic forced the government to stop tinkering with goods and services tax rates, and it is likely to stay that way next financial year as well, according to a senior finance ministry official.

"If we did not cut GST tax rates this y ear, why should we do it next year?" the official told Informist. Instead, the government will focus on rationalising the GST tax slabs and correcting inverted duty structures, the official said.

"These changes will be made in such a fashion that they are revenue neutral ," the official said.

Over the years there have demands to r educe the number of major tax slabs under GST fr om the existing four--5%, 12%, 18%, and 28%.

In her Budget speech, Finance Minister Ni rm ala Sitharaman had said the government intends to remove anomalies such as inverted duty structure to further smoothen the GST regime.

In f act, Sitharaman said in June that inverted duty structure was hitting collections and the GST Council discussed removing these anomalies in sectors such as textiles, footwear, and fertiliser. Inverted duty structure occurs when inputs are taxed at a higher rate than the finished products.

With the government focussing on stabilising revenues, there are no plans to reduce GST rates on cement and automobile parts, the official said.

There have been demands for reducing the GST rate on cement fr om 28% and charging a uniform 18% rate on all automobile parts.

"I don't see an y ra te cuts on cement or auto par ts. Even before the GST regime, cement was tax ed around 28%," the official said.

The official said the next GST Council meeting is likely to be held during Parliament session recess.

The Budget Session of the Parliament is expected to be in recess between Feb 15 and Mar 8.