The GST Council will take up any modifications in the tax rate only once a year and execute all GST rate adjustments strictly from April 1, coinciding with the beginning of the financial year, according to sources in the Finance Ministry.
The GST Council, chaired by Union Finance Minister Nirmala Sitharaman alongside state finance ministers, had decided during its September meeting last year to rationalise tax rates and slabs, consolidating the previous four-tier structure (5, 12, 18, and 28 per cent) into a streamlined two-tier framework of 5 and 18 per cent.
Finance Ministry sources clarified that tax rate revisions have not been included on the agenda for the upcoming 57th GST Council meeting scheduled for October 8.
Sources stated that all future tax rate alterations will be considered once a year and implemented starting April 1. The upcoming meeting will focus on a selected set of issues aimed at streamlining processes and eliminating ambiguities.
To offer greater administrative clarity, the Council is expected to consider approving a uniform 5 per cent GST rate without input tax credit for deliveries through e-commerce platforms.
“Stability is worth more to most businesses than any single concession,” a source noted, adding that a stable tax structure enables firms to price long-term contracts effectively and plan capital expenditure with greater confidence.
Sources observed that the revamped rate structure introduced last year has been operational for nearly a year and has proven beneficial for consumers, industry stakeholders, tax revenues, and the wider economy.
The tax rate rationalisation rolled out last year has strengthened consumer demand while supporting steady growth in GST revenues, with monthly revenues consistently recording double-digit expansion since June this year.
GST rates are set to remain unchanged at the Council’s October 8 meeting, with Council instead expected to focus on a package of procedural and structural reforms covering registration, refunds, input tax credit, and enforcement, Finance Ministry sources said.
The meeting is not expected to consider any broad rate changes, with only a limited set of rationalisation and clarification issues on the agenda, the sources said.
Officials pointed to the performance of the two-rate GST structure over the past year as supporting rate stability. Between October and July, taxable supplies rose 25.8 per cent year-on-year, while gross tax liability increased 13.6 per cent. The effective tax rate on domestic taxable supplies declined to 13.13 per cent from 14.55 per cent.
Source from: https://www.etnownews.com/economy/gst-rate-changes-to-take-effect-only-once-a-year-from-april-1-finance-ministry-sources-article-156284570
