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Fitment panel against GST cut on 40 items

Reduction in GST rate on items like medicines and ambulances could be extended for at least another three months.

Published: 17th September 2021 10:42 AM  |   Last Updated: 17th September 2021 10:42 AM   |  A+A-

Union Finance Minister Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman (Photo | Shekhar Yadav, EPS)

Express News Service

NEW DELHI:  As Finance Minister Nirmala Sitharaman is going to chair 45th GST Council meeting on Friday, officials claim that the council is unlikely to go for a major deduction of rates, with the fitment committee advising against any rate reduction, barring few Covid related items.

“There were requests for rate reduction of about 40 odd items. However, this is unlikely to happen as the fitment committee has advised against any drastic rate cut, keeping in view the revenue situation and additional compensation burden,” a senior finance ministry official told TNIE. The official, however, added that some items, which are essential in nature and is related to Covid may see some reduction.

The council, which will be meeting for the first time physically in Lucknow, is expected to discuss various issues, including extension of compensation period beyond 2022, inverted duty structure on selected items and bringing food delivery app under GST and also, as reported by some section of media, including petrol and diesel under the ambit of GST.

“The GST Council is physically meeting after a long time, and the industry is keenly looking forward to this meeting. Issues such as bringing petroleum products, natural gas under GST ambit, capacity-based taxation for tobacco products, future of compensation levy, GST rate rationalisations are expected to be discussed in the meeting. It will also be interesting to see if the GST Council extends the GST exemptions for essential Covid supplies for a further period,” Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co, said.

However, the main item would be the question of GST compensation. States were promised compensation by the Centre for a period up to 2022 if their expected tax share did not increase by 14% every year from 2017, when GST was launched. Citing the economic slowdown due to Covid, states want compensation to continue beyond next year, while the Centre is pushing for a percentage much lower than the previous 14%. Many presentations are expected in this context. Reduction in GST rate on items like medicines and ambulances could be extended for at least another three months.

Issues on the table for discussion

The council, which will be meeting for the first time physically in Lucknow, is expected to discuss various issues, including extension of compensation period beyond 2022, inverted duty structure on selected items and bringing food delivery app under GST.



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