In its meeting this Saturday, the GST Council is likely to discuss rates of millet-based products and amendments to provisions related with setting up of GST Appellate Tribunal (GSTAT). It is also expected to review the progress on implementation of 28 per cent uniform duty for online gaming, casinos and horse racing.
Meanwhile, the Council-appointed Fitment Committee (comprising tax officials from Centre and States) has rejected a proposal on lowering tax on electric vehicle batteries, uniform additional compensation cess on tobacco-related products and GST levy on steel scrap on reverse charge mechanism basis.
GST Council is chaired by the Finance Minister while the Minister of State in the Finance Ministry, representative Ministers or nominated official from 28 States and 3 Union Territories are members of the Council.
Also read: GST collection rose to ₹1.63 lakh cr in September, pace of growth slowed down
According to sources, as 2023 is being celebrated as the ‘Year of the Millets’, the GST Fitment Committee has recommended reducing the rates to promote millet-based products. Food preparation of millet flour in powder form, containing at least 70 percent millets by weight, is likely to attract NIL GST if sold loose. For pre-packaged and labelled form of such products, the rate is likely to be 12 per cent as against 18 per cent at present.
Appellate tribunals
Sources said the Council might recommend levying 18 per cent GST on loans secured by India Inc on bank guarantees. The Council is also expected to modify conditions for appointment of members in GST Appellate Tribunals. While the government has notified setting up of 31 Appellate Tribunals in 28 States and eight Union Territories in the country last month, procedural issues including the terms of reference for appointments of Chairman and members are still pending.
The Centre and States are hoping to have the tribunals operational by the year end to take forward the large number of GST cases. According to industry chamber CII, the number of appeals against the orders of first Appellate Authorities has been rising sharply, which in the last two years alone moved up by more than double from 5,499 in 2020-21 to 11,899 cases in 2022-23
On EV batteries
Meanwhile, sources said the fitment committee has turned down industry’s proposal seeking 5 per cent tax on EV batteries instead of 18 per cent. Also, it has put down a proposal by industry for uniform additional compensation cess on cigarettes, bidis, smokeless tobacco products. “In respect of tobacco and tobacco products, while deciding the compensation cess rates, it was decided that, in line with the weighted average VAT rate (28.7 per cent), the GST rate on cigarettes may be kept at 28 per cent,” sources said.
Also read: India notifies 28% GST and key changes for overseas online gaming platforms, effective October 1
Also, products such as cigarettes, chewing tobacco and gutka, will attract GST, compensation cess, basic excise duty and National Calamity Contingent Duty (NCCD), while bidis attract GST, basic excise duty and NCCD.