GoM on GST rate rationalisation fails to reach consensus

People with knowledge of the matter said that the Group of Ministers GoM on goods and services tax rate rationalisation could not reach a consensus on inverted duty correction or changes in slabs at a virtual meeting on Friday. The GoM is unlikely to have its report ready by the time of the GST Council meeting on June 28 - 29 in Srinagar and will possibly get an extension of four-six months, they said. A seven-member ministerial group led by Karnataka chief minister Basavaraj Bommai met online to examine various options for change of tax slabs, revenue augmentation and inverted duty correction, among others. The GoM meeting was inconclusive. One of the persons cited above said that this is not the right time to go for inverted duty correction. Any decision on modifying GST slabs - changing or merging them - will require greater study. The person cited above said that the GoM is yet to figure out the revenue implication of changes in slabs. It is a time-taking process and requires many meetings. The GST rate rationalisation exercise is likely to be delayed because of inflation pressure and both the Centre and state governments are of the opinion that this should be done after prices are lessened, according to ET last month. Retail inflation as measured by the Consumer Price Index CPI was 7.04% in May, faster than the outer bounds of the Reserve Bank of India target range of 2 -- 6%. The Friday meeting discussed the list of exempt items under the GST. The detailed list of recommendations is likely to be finalized next week, after which it will be submitted to the GST Council for further discussion. The finance ministers of West Bengal, Kerala, Goa, Bihar, Uttar Pradesh and Rajasthan are also members of the GoM on rate rationalisation.