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Govt sets up Ministerial panels to review GST exempt items, identify potential evasion sources

28 Sep 2021 Evaluate

The Finance Ministry has set up two committees of state finance ministers which would rework rate slabs, review GST exempt items and identify potential evasion sources. Four years after the rollout of the national Goods and Services Tax (GST), which replaced the complex indirect tax structure, the center and states have started work on moving towards a ''simpler rate structure in GST'' by reviewing the current rate slabs, including special rates and merger of rate slabs.

The Group of Ministers (GoM) on rate rationalization would also review items under inverted duty structure to help minimize refund payout, and review the supply of goods and services exempt under GST to expand the tax base and eliminate breaking of input tax credit (ITC) chain. 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 panel, which would give its recommendation to the council from time to time, would review IT tools and interface available with taxmen and suggest ways to make them more effective, identify possible use of data analysis towards better tax compliance, and suggest ways of better coordination between central and state tax officers. The decision to set up these two GoMs was taken by the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, on September 17, 2021.

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