Currently, in the 37th Council Meeting, the GST Council gave some sectors a reason to celebrate by allowing reliefs in GST rates while some remained disheartened with the denial.
Earlier to the meeting, Auto and biscuits sectors were streaming in headlines as the respective dealers endeavoured for GST cut off in order to revive their sectors, but the council denied amendments in GST rates for these sectors. Similarly, 165 other sectors including ghee, butter, cheese and dry fruits met with the same fate.
Fitment committee, the subsidiary committee of the main GST Council comprising of tax officers from Centers and States recommends the council for changes in GST rates based purely on scrutiny. The council is the final decision maker in the process.
Paying heed to the GST rates, including compensation cess and other procedural issues for 200 categories of goods, the Fitment Committee denied amendments for 167 categories of goods, the decision for 10 other categories was postponed and the rest 32 got recommendations from FC for GST reduction.
In terms of GST on Ghee, Cheese and Butter, the current tax rate for these commodities is 12%. Recommended was a 5% relief. Justifying the fact that pre-GST tax on such commodities was nearly 12% and the products are largely sold by the organized sector and companies such as Amul and Mother Dairy, no change was recommended. “Small manufacturers can avail themselves of threshold exemption,” said FC.
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GST rate cut on instant food mixes such as Idli Mix, Vada Mix, Dosa Mix, Gulab Jamun Mix, Thandai Mix, Payasam Mix and Upma Mix was recommended to reduce from current 18% to proposed 5%. Marking that the intake of such foods is only by better-off sections of the society, who definitely can afford to buy the product on such rates, the proposal was denied.
GST rate on the Idli dosa batter is brought to 12%. Instant food mixes are manufactured and sold by organized corporations, rate cut may remain unfamiliar to the customer thus leading to profit-making. Hence no reforms were recommended in GST rates for such sectors said FC.
Dealers demanded GST rate cut on helmets which was not favoured by the FC. Inputs in helmet manufacturing involve 18% GST. Rate cut on helmets to 12% may lead to manufacturers seeking a refund unutilized input tax credit, with associated financial and administrative costs.
