Following the Karnataka state elections, the Goods and Services Tax Council will need to nominate a new chairperson for the important group of ministers (GoM) on rate rationalisation. Basavaraj S. Bommai, the former Chief Minister of Karnataka who resigned after the BJP was defeated in the assembly elections, served as the convener of the GoM on GST rate rationalisation.
The GoM was established in September 2021 to assess the rate structure of the indirect tax imposed including the correction of the inverted duty structure to streamline rates, lowering classification-related disagreements, and increasing revenue.
In order to rectify the inverted duty structure of several items, the seven-member GoM submitted an interim report on rate rationalisation in June 2022. However, its major objective of assessing the rate structure for GST is still pending. As per the government sources, it’s unlikely that the overhaul of the GST system will be done until the general elections which will be held in 2024.
When a member of the GoM resigns, a minister from the same state is typically appointed in their place. Uncertainty surrounds whether this would be the case if the Congress government came to power in the state. When Finance Minister of West Bengal, Amit Mitra, who served as a member of the GoM in the state, resigned and was replaced by his colleague in the state cabinet Chandrima Bhattacharya, the state’s minister for urban development and municipal affairs.
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Moreover, the chairperson, Tarkishore Prasad, the former deputy chief minister of Bihar, who resigned in August 2022, would need to be replaced. According to sources, there hasn’t been any move taken to appoint his replacement on the GoM as of yet.
As of right now, no GoM rate restructuring meeting is scheduled. After the swearing-in of the new Karnataka Government, a new chairperson may be appointed. It’s still early, a source from the government said that Prasad’s replacement is also awaited.
Kerala Finance Minister KN Balagopal, Goa Minister for transport and Panchayati Raj Mauvin Godinho, Rajasthan Minister for local self-government, urban development and housing Shanti Kumar Dhariwal and Uttar Pradesh Finance Minister Suresh Kumar Khanna are among the other members of the GoM.
Concurrently, with the Cabinet reshuffle in Tamil Nadu, two other GoMs of the GST Council– associated with the system rectification and other issues, will have to be remodelled with a new member. Up to this point, Palanivel Thiaga Rajan, the former finance minister and current IT minister of Tamil Nadu, was a member of these two GoMs. However, he is believed to be replaced by the new finance minister Thangam Thennarasu.
The official sources cleared that there have not been any changes discussed or decided in these GoMs.
