Responding to an unstarred question in the Lok Sabha, Minister of State for Finance Shri Pankaj Chaudhary said that GST rates are determined by the GST Council—a constitutional body that includes representatives from both the Centre and the States/Union Territories.
In reply to a query from Samajwadi Party MP Shri Ujjwal Raman Singh on whether the government intends to lower GST rates for the benefit of the common man, the Minister stated:
“GST rates are prescribed on the recommendations of GST Council, which is a constitutional body comprising of representatives from States/UTs and Centre. In its 45th meeting held on September 17, 2021, the GST Council has constituted a Group of Ministers (GoM) on GST Rate Rationalisation. The Group of Ministers have not submitted its report to the Council.”
Given the absence of the GoM’s recommendations, the questions on the quantum of proposed rate cuts or the timeline for their implementation, the Minister said, “do not arise.”
The clarification comes at a time when there is increasing demand for tax relief amid persistent inflationary pressures.
Hopes for a possible GST rate revision had been fuelled by reports that the GoM, on rate rationalisation was considering a comprehensive overhaul of the current multi-slab structure to make it more efficient and equitable.
The GST regime currently operates with four main tax slabs—5%, 12%, 18%, and 28%—along with special rates for certain goods and services. Over the years, various stakeholders, including industry bodies and policy experts, have urged the Council to simplify the structure by merging slabs and correcting inverted duty anomalies.
The rate rationalisation exercise, initiated in 2021, has been delayed several times due to political transitions in some states and evolving economic conditions. The GoM’s recommendations are expected to be crucial in shaping the next phase of GST reforms.