Fresh GST tweaks to wait as govt scans reforms' execution

Central and state governments will retain the current framework of the indirect tax system and maintain the existing goods and services (GST) tax rates as they assess the impact of recent reforms on revenue collection growth before introducing further rate revisions or structural changes such as subsuming petroleum products, according to two people aware of internal discussions.

- Gireesh Chandra Prasad

Nurturing Centre-state fiscal relations and stepping up revenue buoyancy through process efficiency will remain the focus of policymakers in the near future, one person said.

The central government will monitor revenue collection trends of the states in view of the concerns expressed during the GST reform deliberations last month by ministers from opposition-rules states. However, the Centre remains optimistic that improved consumption demand will make up for any dip in revenue collection due to the steep tax rate cuts, the two people said, speaking on condition of not being identified.

This means that GST rates will likely remain at current levels in the near future and taking up the unfinished agenda of subsuming crude oil, natural gas, petrol, diesel and jet fuel within the GST framework will have to wait.

The GST Council approved a comprehensive overhaul of the GST structure and rates at its 56th meeting on 3 September.