There are enough chances of goods and services tax (GST) overhaul soon. The Central Government and states will implement a proposed structural revamp of the phases, keeping in mind the impact tax rate changes can have on consumption.
A group of ministers (GoM) led by Karnataka Chief Minister Basavaraj Bommai is likely to meet soon to finalise the restructuring recommendations. The final recommendations will be taken up in the upcoming GST council meeting.
Basavaraj Bommai is also the Chairman of the GoM formed by the GST Council.
As per media reports, the revision may simplify the rate structure and seek to lift revenue for states. The GST compensation given to states will end in June. The restructuring, which will be implemented in phases, may cut down tax exemptions, introduce only three major tax slabs and remove anomalies from taxing raw materials and intermediates.
The centre and states may implement a proposed structural reform in phases to minimise the impact of the tax rate changes on consumption.
As per reports, the revisions may include the implementation of tax rate changes needed in the textile industry that will correct the inverted duty structure.
Several items in the textile and apparel sector were deferred a rate hike from 5 per cent to 12 per cent by the GST council on 31 December. These included woven fabrics of cotton, silk and wool, coir mats, apparel and clothing accessories worth a sale value of Rs. 1,000.
The rate hike was to take effect from 1 January 2022, but was put on hold.
Recently, apparel industry delegation also met Basavaraj Bommai in this regard and urged support for GST.
