GST Council to extend tenure of GoM in December 31 meeting

Besides, the Fitment committee, comprising tax officers from states and the Centre, has made many "sweeping" recommendations to the GoM regarding slab and rate changes and taking items out of the exemption list. Currently, there are as many as six slabs - 0 percent, 0.25 percent for semi-precious stones/diamons, 3 percent for precious metals, 5 percent, 12 percent, 18 percent, and 28 percent for other goods and services. On the top of the highest slab, a cess is levied on luxury and demerit goods.

Tax administrations ideally want just three rates and there have been demands of merging the 12 and 18 percent slabs. There are also demands that some items be taken out from the exempt category to balance the impact of slab rationalisation on revenue.

GoM's task was to rationalise the whole range of GST rates. This included reviewing exemptions, tax slab rates, the merger of tax slab rates, and inverted duty structure. It was tasked to submit its report by November-end.

West Bengal's former finance minister Amit Mitra has urged the Union finance minister to roll back a proposed hike in textile from 5 percent to 12 percent saying this would lead to the closure of around one lakh textile units and 15 lakh job losses.

Meanwhile, Telangana Industries Minister KT Rama Rao has urged the Centre to withdraw the proposed plan to increase GST rates. The industry has also opposed the rise in tax from 5 percent, citing higher compliance cost especially for the unorganised sector and MSMEs.