The GST Council came up with some new recommendations where the committee might decide to review the GST rates once every three months. Also, a convergence of tax rates for 12% and 18% might be around the corner.
The Fitment committee prepared These recommendations through a new approach paper. The paper also suggests that there would be few chances to revise the rates as well in the next three months at least as in the last few meetings a huge number of items have gone through a lot of rate changes. On September 9 itself, rates of as many as 40 items were revised.
The main motive of the council of late has been that the policy objectives are achieved. One of the main objectives has been that the rates had to be simplified. This means either the rates are converted to a single rate or are lowered down to two rate slabs of 12% and 18%. Currently there are five rate slabs, 0%, 5%, 12%, 18% and 25%. Thus the Council believed that to achieve a single rate, these should be reviewed once in every three months instead of at every meeting of the council.
The review of the GST rates applies particularly to the 28% tax slab, and the norms will be applicable only for the items of mass consumptions or items that are of public interest or MSME product. The revenue constraints might also be taken up for a review.
Till date, the GST Council had been following the philosophy of applying immediate charges on any product that has high yielding revenue or a luxury item or is a sin good such as cigarette or tobacco.
However, this remains to be seen as to how the council reacts to the paper and if it is adopted or not. The next meeting is scheduled on 24th October 2017.