In its forthcoming meeting on July 11, the GST Council is likely to define MUV (multi utility vehicles) and finalise rates on millet products. It is also expected to take up the issue of new GST mechanism for online gaming, horse racing and casinos but officials say it will be a “difficult decision” to take considering strong views emerging from some States.
“After December 2022 meeting clarifying regarding GST applicability on SUV, there has been demand for the same for MUV. Based on the recommendation of Fitment Committee, the Council is expected to take a call on it,” a senior government official told businessline. At present, MUVs attract GST at the rate of 28 per cent and then they attract compensation cess of 22 per cent, but there are ambiguities and like SUV, States are also seeking clarification on MUV.
More space, utility
MUV is a type of vehicle designed to offer more space and utility than a traditional passenger car. They typically have a boxy shape and a large, spacious interior that can accommodate a large number of passengers and cargo. Maruti Suzuki Ertiga, Mahindra Marazzo and Renault Tribe are MUVs.
In December, the Council recommended that the higher rate of compensation cess (cc) of 22 per cent is applicable to motor vehicle fulfilling all the four conditions — it is popularly known as SUV, has engine capacity exceeding 1500 cc, length exceeding 4000 mm and a ground clearance of 170 mm or above. Overall there is no change in rate of tax or cess and total GST will continue to be levied at the rate of 50 per cent (28 per cent GST plus 22 per cent GST compensation cess). Now, similar clarification is expected for MUV.
Millet Products
The official mentioned that there have been specific demands for GST rate on millet-based health products. Considering 2023 declared as ‘International Year of Millets’, it would be appropriate for finalising the rate of such products. “As on date, there is no specific entry for millet-based health mix products, so these attract rates up to 18 per cent,” the official said. Now the effort would be to classify the product according to the percentage of millets and based on that rate to be prescribed.
Online Gaming, Casinos and Horse Racing
Meanwhile, intense discussion is expected on a report by Group of Ministers (GoM) on online gaming, casinos and horse racing. According to official, the GoM in its second report said: “since no consensus could be reached on whether the activities of online gaming, horse racing and casinos should be taxed at 28 per cent on the full face-value of bets placed or on the GGR (gross gaming ratio), the GoM recommends GST Council to decide.”
The official admitted that considering strong opinions of West Bengal and Uttar Pradesh, a final decision will be very difficult. “A middle path could be there may not be change in the rate of 28 per cent, but base value for calculation of rate for all three could be defined,” he said.
This will be the 50th meeting of the Council which is chaired by Finance Minister. Its members include Union Minister of State in the Finance Minister, representative Ministers of 28 States and representatives of three Union Territories with legislature taking the total strength to 33. Revenue Secretary is the Secretary to the Council while Chairman of the Central Board of Indirect Taxes & Custom (CBIC) is special invitee.