The GST council has been in a dilemma of putting various goods into the category suitable for them. The government is preparing to roll out the well-discussed goods and service tax in coming months and in between it has been stuck on the issue of categorization of products. The council is going through confusion all at once. In order to clearly step into the categorization process, the government is also going through the previous cases of division of products to save himself from the repeated mistakes done. From the internal sources, it has been acknowledged that the government is stressing upon the exercise of categorization for the maximization of revenue earnings.
An officials source described that earlier, many tax officials challenged the product category. Many of these products belonged to the retail segment. However, we had to face defeat in this case at the court or at the appellate level, Now we have the opportunity to decide on the category of products based on the old case so that no such situation can be created again.
Read Also: GST Network: Role of GST Suvidha Provider in India
Deloitte Haskins and Sales Senior Director M.S. Mani said the GST rate of each item is not fixed as the government is finalizing the category of products. It is watching what rate can be for every category. The Income Tax Department had raised questions about the first product category, and the companies could again have trouble with them because GST is a new law. In this, the categories of products and rates can be redefined.
Some states have also raised questions in this matter, as Kerala Minister for Finance T.M. Thomas Isaac on a product meeting recently held in a closed room that Coconut oil should be considered as edible oil rather than hair oil. Actually, edible oil and hair oils have different taxes and hair oil is not a necessary product. In the same case, the well-known coconut oil which is used in Kerala for the purpose of the edible ingredient, which has roused interest especially in this category.