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GST Update: Constitution of two Group of Ministers (GoMs) on GST systems reforms and rate rationalisation

Pursuant to 45th GST Council Meeting held on September 17, 2021 in Lucknow, the GST Council has formed two Group of Ministers (GoM) as follows:

  1. GoM on system reforms:

The GST Council acknowledged the need to introduce IT based checks and balances in the GST IT system and use of data analysis like BIFA system of GSTN and stressed on expanding use of data analytics in increasing efficacy and efficiency of GST administration.

Shri Ajit Pawar (Deputy Chief Minister of Maharashtra) is the Convenor of this GoM. The terms of reference/ scope of this GoM is as follows:

  1. Review the IT tools and interface available with tax officers and suggest measures to make the system more effective and efficient including changes in business processes;
  2. Identify potential sources of evasion and suggest changes in business processes and IT systems to plug revenue leakage;
  3. Identify possible use of data analysis towards better compliance and revenue augmentation and suggest use of such data analysis;
  4. Identify mechanisms for better coordination between Central and State tax administration and tax administration of different States; and
  5. Suggest timelines for changes recommended.
  1. GoM on rate rationalisation:

The GST Council discussed the need to undertake GST rate rationalization including correction of inverted duty structure with the objective of simplifying rate structure, reduce classification related disputes and enhance GST revenues. In this regard, GoM on rate rationalization was constituted to look into matters related to rate rationalization and correction of inverted duty structure.

Shri Basavaraj S. Bommai (Chief Minister of Karnataka) is the Convenor of this GoM. Terms of reference/ scope of this GoM is as follows:

  1. Review the supply Of and services exempt under GST With an objective expand the tax base and eliminate breaking Of ITC chain;
  2. Review the instances Of inverted duty structure Other than where Council has already taken a decision to correct the inverted structure and recommend suitable rates to eliminate inverted duty structure as far as possible so as to minimize instances of refund due to inverted duty structure;
  3. Review the current tax slab rates and recommend changes in the same as may be needed to garner required resources; and
  4. Review the Current rate slab Structure Of GST, including special rates and recommend rationalization measures, including merger Of tax rate slabs, required  for a simpler rate Structure in GST.

NASSCOM will be engaging with these GoMs to suggest measures for enabling ease of doing business. In this regard, if you have any suggestions, please write to tejasvi@nasscom.in

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