High inflation may delay rejig of GST rates

NEW DELHI: Inflationary There may be a fee GST rationalization rate as Center and states may find it prudent to delay a decision until prices stabilize given that states could see increased tariffs on some items, government sources said Wednesday.
Although a group of state finance ministers has been formed to look into the matter, it has yet to back the move and GST . Council unlikely to meet until the second half of June.
Government sources said on Wednesday that the imposition of the GST rate could cause tariffs on some items to rise, and the Center and states could postpone the decision until inflation eases.
“There is a real problem in rationalizing rates. Even if the GoM submits its report now and it is presented to the Council, will the Council accept? It is difficult to say because the ecosystem is struggling,” said a senior government official. While this issue also surfaced in 2019, the GST Council decided to delay its decision on the matter due to the economic downturn and Covid-19 The impact meant that the matter of rationalizing and reworking the panels could not be done in two years.
The ministerial council was formed after a meeting in Lucknow last September. Some experts have argued that it is important to rebuild the current mechanism due to problems related to classification as well as to further improve revenue collection due to the current revenue neutrality ratio in the country. around 11.5% compared to 15% estimated prior to the mode’s launch in 2017.

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