• Notification Date: 05-02-2025
• Notification No: N/A

GST Rate Rationalisation Faces Challenges Amid Socio-Economic and Revenue Considerations: CBIC Chairman

The rate rationalisation of Goods and Services Tax is a complex process in itself, as CBIC Chairman Sanjay Agarwal feels that it is a balancing act between socio-economic needs and revenue generation. In an interview with Money control, he noted that while simplifying the tax structure is the ideal requirement, multiple factors are making it a challenging task.

Agarwal said, "Clearly, the Group of Ministers is thinking of all aspects of the structure of GST rates." The GoM, led by Bihar Deputy Chief Minister Samrat Choudhary, will concentrate on removing anomalies in rates and resolve disputes over item classification by making taxes uniform in similar items.

The rates of GST were initially fixed with revenue neutrality in mind. However, socio-economic considerations have made it imperative to review these rates afresh. Agarwal said, "It is easier to cut tax rates rather than increase them. The GoM will give its report after a consensus is reached on the pressing issues.”

The committee comprises Finance Ministers of Uttar Pradesh, Rajasthan, Karnataka, West Bengal, and Kerala working on the simplification of the GST system with a stern commitment to both revenue and socio-economic goals.