The group of ministers on GST rate rationalisation is expected to focus on tweaking tax rates to achieve a delicate balance between easing consumers’ burden and maintaining sufficient revenue for the exchequer, analysts said. The panel led by Bihar deputy chief minister Samrat Chaudhary will meet on September 25 in Goa.

“There is a possibility of merging the 12 and 18 per cent rates into a single percentage for simplifying the tax structure. However, any such move would need very careful consideration and extensive consultation with businesses,” said Manmeet Kaur, partner at Karanjawala & Co.

“The stability in the GST rates is one of the factors responsible for the stable GST collections during recent times,” said M.S. Mani, partner at Deloitte India.

“Reducing the number of slabs could potentially involve not tinkering with these rates and eliminating the 12 per cent slab by moving products in this slab to the 5 or 18 per cent slab.”

Nevertheless, merging tax slabs is not without challenges. “The GST rate rationalisation can affect inflation and the economic condition of a particular segment of consumers,” said Rajarshi Dasgupta, executive director-tax at Aquilaw.

Shashi Mathews, partner at IndusLaw, said “on merging tax slabs, the members of the GoM principally hold a negative view. Accordingly, a substantial change on this front is unlikely.”

“The rate rationalisation should have a positive impact on trade in general if it is kept within the range of 14-15 per cent,” said Onkar Sharma, partner at Khaitan & Co.

“The 12 and 18 per cent GST slabs are significant revenue drivers. However, merging these rates into a single 15 per cent could have far-reaching economic consequences,” said Rajat Mohan, executive director at MOORE Singhi.

However, merging the 12 and 18 per cent slabs into a rate lower than 18 per cent could result in a revenue loss. “The 18 per cent slab holds a two-fifth share in total taxable value,” said Sacchidananda Mukherjee, associate professor at NIPFP.