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Demand to lower the GST rate on over 200 products may be rejected by the GST Council: Report

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Demand to lower the GST rate on over 200 products may be rejected by the GST Council: Report

Tetra packs now have a lower GST rate than other alternatives such as cartons, plastic bottles, sachets and pouches, and plastic cups; hence the Council has suggested raising this rate.

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The suggested adjustments to the goods and services tax (GST) rate for more than 200 items will be discussed in a ministerial panel meeting the following week. According to a Business Standard report, the panel of government officials rejected requests for a reduction in the levy on more than 200 goods and services to lessen the burden of inflation on consumers while also proposing a change in the GST rate for several items, including tetra-packs.

The government committee may ask the state of Karnataka and Haryana to study the nature and taxability of various activities taking place in the crypto ecosystem. “During the meeting, it is likely to consider the fitment committee’s recommendations, which also call for raising the GST rate on tetra packs from the current 12 percent to 18 percent. “To bring uniformity in tax structure concerning other substitutes, such as cartons, plastic bottles, sachets and pouches, and plastic cups, the Council’s fitment committee, which is composed of revenue officials from the Center and states, recommended raising GST rate on tetra packs,” the report said.

The committee also suggested that the GST Council make it clear that some defense equipment imported by private organizations should be excluded from IGST where the end-user is the military and that electric cars would be subject to a 5 percent GST.

The government panel will meet in Chandigarh for two days starting June 28. Although it is doubtful that a rate would be decided upon at the meeting, discussions of including it in the highest tax bracket of 28 percent may occur, according to the sources.

According to the sources, the council, made up of the finance ministers of the federal government and the states, is attempting to expand the tax net to more effectively track transactions involving virtual digital assets.

To gauge the scale of the country’s cryptocurrency sector and keep tabs on users, Finance Minister Nirmala Sitharaman enacted a 30 percent tax on revenue from the transfer of virtual assets and a 1 percent tax at source on all cryptocurrency transactions earlier this year. The action was perceived as resolving doubt over the legality of cryptocurrency transactions. Due to the ambiguity around whether digital currencies should be treated as products or services and the absence of a legal framework, there is still uncertainty over implementing a sales tax on them.

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