GST 2.0: Finance ministry holds discussions with industry representatives

Strap:

Surabhi

The Union finance ministry has held discussions with industry representatives over concerns around the goods and services tax (GST) and recommendations on how to improve the indirect tax levy. The discussions, taking place in recent weeks, come against the backdrop of work being undertaken by the GST Council to review and rationalise the multiple rate structure of the tax.

According to sources, industry representatives too have raised the issue of reduction of multiple rates under GST and have also called for simpler classification that would help to reduce disputes and litigation. Sources said that issues around the complexity of GST was also discussed.

Further, industry representatives are understood to have called for a three-rate structure of GST as well as measures to improve compliance, which in turn will lower the tax burden while mobilising more revenue.

The move comes at a time when the GST Council, headed by Union finance minister Nirmala Sitharaman is already working on rate rationalisation of the indirect tax levy. A Group of Ministers headed by Bihar Deputy Chief Minister Samrat Chaudhary is already working on how to rationalise and simplify the tax structure.

With GST set to complete eight years in July this year, there have been calls for a complete overhaul of the indirect tax levy to take care of various issues that have emerged over the years and introduce a more simplified tax under GST 2.0.

The GST Council in its last meeting in December 2024 had deferred the issue of rate rationalisation as the GoM had deferred submission of its report at the time.

It is expected that a meeting of the GST Council will be called sometime soon, possibly in early July, although a data has not been finalised as of now.

Sources have indicated that the finance ministry has been “studying” various options on improvements in GST and how to take forward the revamp of the indirect tax levy. Several states are also understood to have raised concerns over possible loss of revenue with a rationalisation in the rate structure of GST.