In a Rajya Sabha unstarred question, Shri Imran Pratapgarhi raised concerns about Goods and Services Tax (GST) rate variations. He asked if the government was aware that minor changes in a product’s form could lead to different tax rates, and whether these inconsistencies were being reviewed.
In a Rajya Sabha unstarred question, Shri Imran Pratapgarhi raised concerns about Goods and Services Tax (GST) rate variations. He asked if the government was aware that minor changes in a product's form could lead to different tax rates, and whether these inconsistencies were being reviewed. He also inquired about the status of the GST Rationalization Committee's work and if the government had considered the impact of these anomalies on Micro, Small, and Medium Enterprises (MSMEs), consumer prices, and compliance.
Shri Pankaj Chaudhary, the Minister of State in the Ministry of Finance, responded that the GST Council, which includes representatives from the central and state governments, sets the tax rates. He confirmed that a Group of Ministers (GoM) on Rate Rationalization was formed at the 45th GST Council meeting in September 2021. This GoM's mandate includes reviewing the current GST rate structure and recommending rationalization measures. However, the minister stated that the GoM is still comprehensively examining all issues related to GST rate rationalization on goods and services and has not yet submitted its final report.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
RAJYA SABHA
UNSTARRED QUESTION NO-1832
ANSWERED ON – 05.08.2025
GST RATE VARIATIONS DUE TO PRODUCT FORM CHANGES
1832 SHRI IMRAN PRATAPGARHI:
Will the Minister of Finance be pleased to state:
(a) whether Government is aware that multiple goods are taxed at different GST rates solely due to minor changes in their form or nature, such as raw and processed versions of the same product attracting widely different tax rates;
(b) whether such inconsistencies are under active review as part of the ongoing exercise to rationalise GST slabs;
(c) the current status of the GST Rationalisation Committee's deliberations, including whether any timeline has been fixed for implementation of a simplified tax structure; and
(d) whether Government has considered stakeholder concerns about how such anomalies affect MSMEs, consumer pricing, and ease of compliance?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) & (b) GST rates are prescribed based on the recommendations of the GST Council which consists of representatives of both Centre and State Governments.
The GST Council in its 45th meeting held on 17th September, 2021 has constituted a Group of Ministers (GoM) on Rate Rationalisation and the Terms of Reference of GoM include review of the current rate slab structure of GST, including special rates, and recommend rationalization measures.
(c) & (d) The Group of Minister is comprehensively examining all issues relating to rationalisation of GST rates on goods and services. The GoM is yet to submit its report.
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