GST reforms will be stalled due to elections

New Delhi: Assembly elections are going to be held in many states this year and Lok Sabha elections are also going to be held next year i.e. 2024. Therefore, a major change in the Goods and Services Tax system will be avoided. Experts say the Center and states are not ready for any other reforms, including changes in tax rates, in view of the elections.

There is unlikely to be any major change in the GST structure till 2024. One of the reasons for this is that considering the rate, the group of ministers members will be busy with the elections to be held in the states. He said that the Group of Ministers is also likely to be constituted afresh. Both the Center and the states are not in favor of frequent changes in tax rates amid inflation uncertainty. He said that this step should be taken only after extensive deliberation.

A group of ministers headed by Karnataka Chief Minister Basavaraj Bomai has been tasked with revising tax rates, simplifying slabs and revising the exemption list for now. Assembly elections are due in May in Karnataka.

There is no consensus on rationalizing the tax structure, with particular focus on raising the existing lower limit of 5 percent to 7 percent and removing the 12 percent cap. Contribution of 12 percent limit to GST revenue is lowest. The 18 percent slab comes with fewer items, but it contributes 65 percent to revenue collection, which should be maintained. There are currently four slabs under the GST tax structure of 5 percent, 12 percent, 18 percent and 28 percent.

In June last year, the council increased the tax on many items from 12 percent to 18 percent. He also abolished exemptions on many items of common consumption like paneer, lassi etc. Now big changes will be made all at once instead of at short intervals.

Six years of GST completed

GST is going to complete six years in July 2023. In such a situation, it is necessary to consider the GST rates as per requirement. Yji can have only three rates.