The highly anticipated review of Goods and Services Tax (GST) rates may experience some delays, but significant discussions are underway. According to recent updates, the Group of Ministers (GoM) responsible for revising GST rates is meticulously evaluating different categories, particularly those falling within the 12% and 18% tax brackets. The GoM aims to finalize decisions on various products and services by the end of September.

The ministers are concentrating on sectors like health insurance and restaurants, which have actively sought adjustments. There may also be changes to GST rates for certain food items, especially where branded and packed products differ from unpacked ones. For example, there could be revisions affecting items like namkeens.

Currently, many items are taxed at 12%, but this bracket generates less revenue compared to the 18% slab, which contributes 73% of total GST collections. Even a small reduction in the 18% bracket could result in significant revenue loss. Given the current political climate, increasing taxes in the 12% bracket seems unlikely.

The GoM, led by Bihar Deputy Chief Minister Samrat Chaudhary, has largely decided to maintain existing rates. This stance will be communicated to the GST Council in its upcoming meeting on September 9. Adjustments related to specific goods and services will be further discussed and presented in the coming weeks.

Despite strong calls from online gaming companies for a review of the 28% tax rate, immediate changes are improbable. States and the central government argue that the high tax rate serves as a deterrent, especially as many gamers face substantial losses.

Similarly, the beverages industry is advocating for clarity on the future of the compensation cess. Industry representatives have requested that rate changes occur only twice a year to minimize disruptions for vendors who face challenges due to frequent tax adjustments after supplying goods and services.

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