Solutions
* The 45th Goods and Services Tax (GST) Council meeting in Lucknow held earlier this month had announced the formation of two groups of ministers (GoM) that would be constituted to review various aspects of the indirect tax regime.
* A GoM led by Karnataka chief minister Basavaraj S. Bommai has been tasked to propose rationalisation of tax rates and considering the merger of different tax slabs within two months.
* This marks the first steps taken by the government towards a complete overhaul of the indirect tax regime to augment revenue.
* The GoM’s terms of reference on rate rationalization said that it would be reviewing inverted duty structure in all items except where the Council has already announced its decision to fix the inverted structure.
* The panel would also have to recommend suitable rates to eliminate the inverted duty structure to bring down instances of refunds as well as undertake a review of the current tax slab rates to propose changes that would be needed to garner required resources.
* The seven-member group includes West Bengal finance minister Amit Mitra, Kerala's finance minister K N Balagopal and GST Council members from Bihar, Rajasthan, Goa, and Uttar Pradesh. The group would have to suggest immediate changes, as well as come up with a roadmap for short- and medium-term changes to the GST rate structure.