Prior to the 37th GST Council Meeting to be held on (20th September 2019), the fitment panel ruled out the idea for GST reduction in automobile and biscuits sectors. Committee believes that the step will lead to adverse tax revenue collection both Center and State levels and is not the correct initiative looking at the current status of GST revenue.
The fitment committee consisting of revenue officers from Central and State government is not in favour of any reductions in GST rates for auto and biscuits sectors. It’s been a long that the auto industry is demanding GST rate cut from 28% to 18%, however, the committee believes that the proposed reduction will adversely affect the revenue. Currently, the auto sector alone manages to accumulate 50-60 thousand crores of the country’s aggregate GST collection.
On the contrary, the fitment committee is willing to accept the proposal for GST reduction in the hotel industry. The committee favoured 18% GST rates on rooms costing up to Rs. 12,000. Earlier 18% GST was only for rooms which cost up to Rs. 7,500.
Sources confirmed that the committee also rejected the proposal of the Telecom Ministry suggesting to reduce GST rates from 18% to 12%. Also, the committee decided not to tamper with the GST rates slabs already fixed for biscuits, bakery products, breakfast cereals, fruits and vegetables, bottled water, ready-to-eat packaged products and other food items.
Further, the committee denied GST reduction on cruise ticket sales as well. Currently, 18% of GST is applicable on cruise tickets. GST Council 37th Meeting headed by FM Nirmala Sitharaman will have discussions on all the above-mentioned recommendations. FM collectively with other key members will land on the final decision to the recommendations made by the fitment committee.
