GST Council mulling increasing average GST rate to 15% from present 11%

The Goods and Service Tax (GST) Council is mulling whether to gradually increase the average GST rate to closer to the revenue-neutral rate of 15 percent, so that compensation to states does not have to be extended beyond June 2022.

At the meeting last week, the centre had presented several options to states, including revenue enhancement measures. It is learnt that among the options given were increasing the average GST rate to be closer to revenue neutral rate and correcting inverted duty structures in a number of items.

As per the centre, the current GST average rate is around 11 percent. Increasing it closer to the revenue-neutral rate will involve hiking rates of some items in the 5 percent and 12 percent brackets.

Officials say that if the centre and states agree to such a proposal, these hikes will happen gradually so as to not cause any sort of inflationary shock.

Source- https://www.moneycontrol.com/news/economy/policy/gst-council-mulling-increasing-average-gst-rate-to-15-from-current-11-7504601.html