GST Council sets up two GoMs to look into rate rationalisation, systems review

The goods and services tax council secretariat Monday notified the setting up of two GoM, one to look into the rate structure and another to look at systems reforms required to plug revenue leakages. The GST Council had decided to set up the two GoMs in its meeting earlier this month.

“… review the current tax slab rates and recommend changes in the same as may be needed to garner required resources,” the office memorandum said.

The current GST has as many as seven rates – exempt, 0.25%, 3%, 5%, 12%, 18% and 28%. The 15th Finance Commission had also recommended the GST rate structure revamp its report.

The seven-member panel, looking to rate structure, would be headed by Karnataka chief minister Basavaraj Bommai and include West Bengal finance minister Amit Mitra, Kerala finance minister K N Balagopal, Bihar deputy chief minister Tarkishore Prasad, Uttar Pradesh finance minister Suresh Khanna, Goa transport minister Mauvin Godinho and Rajasthan urban development and housing minister S K Dhariwal.

The GoM has been given two months to submit its report of short, medium and long term recommendations. The panel may submit an interim report for such immediate measures as it may deem fit.

It would also look at measures needed to eliminate breaking of input tax credit, special rates and rationalisation and review inverted duty structure.

Systems revamp in focus
The GoM on GST system reforms would identify potential sources of evasion and suggest changes in business processes and IT systems to plug revenue leakage.

The eight-member panel, headed by Maharashtra deputy chief Minister Ajit Pawar, would include Delhi deputy chief minister Manish Sisodia, Tamil Nadu finance minister Palanivel Thiaga Rajan and Chhattisgarh commercial tax minister TS Singh Deo.

The panel would review IT tools and interface available with tax officers and suggest ways to make them more effective, identify potential sources of evasion and suggest changes in business processes and IT systems to plug revenue leakage.

The panel would also identify possible use of data analysis towards better tax compliance and suggest ways of better coordination between central and state tax officers.

The panel will give its recommendations to the Council from time to time, and will review implementation of the recommended changes. GST Network will provide the necessary secretarial support to the GoM.