GST Council may consider 3-month rate freeze

KR Srivats New Delhi | Updated on January 27, 2018

Move could help stabilise IT platform

The GST Council may freeze tax rates for three months, given that the IT system is under challenge on account of frequent changes in rates.

The rate freeze will most likely apply only for the 28 per cent rate category. Currently, the most intense lobbying is to bring items from the 28 per cent rate to 18 per cent.

Also, the GST Council will not relent in the face of any demands for a rate review on ‘sin goods’, source close to the GST Council said.

A three-month freeze would also enable a meaningful analysis before tweaking rates.

It is being felt that the IT system is under challenge because rates are changing very often. Repetitive changes in rules and rates are leading to challenges for IT teams.

In order to provide stability to the IT platform while making the necessary changes, it is felt there is need to have a moratorium on changes in rates.

This proposal is being discussed at the level of the ‘fitment committee’ of the GST Council, it is learnt.

Meanwhile, a sub-committee of 3-4 officials has been tasked with framing new guidelines for review of rates.

The guidelines will form the basis on which rate reviews would be undertaken in future, sources added.

On the proposal for a three-month rate freeze, MS Mani, GST-partner, Deloitte in India, told BusinessLine: “It would be good to have a temporary freeze on rate changes in GST, unless absolutely warranted, in order to impart some degree of certainty.”

However, he added, “this means that businesses whose representations have not yet been addressed would have to wait longer for redress.”

The GST Council is also aware that the benefit of reduced tax rates is not being passed on to consumers.

Only in the auto sector was the benefit of lower rates passed on. There is hardly any sector where businesses have passed on the benefit of lower tax rates under GST, Mani added.


The Centre is yet to put in place an anti-profiteering authority. While an anti-profiteering mechanism would notionally prove a deterrent, enforcing its mandate would be difficult, say GST experts.

Pratik Jain, Partner & Leader-Indirect Taxes, PwC India, said it is important to get a comprehensive review done of all business processes that are being used for compliance at the GSTN portal and align these processes with GST laws.

Published on September 17, 2017

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