28th meeting of GST Council under the chairmanship of Union Finance Minister Piyush Goyal is being held in Vigyan Bhawan, Delhi. Several important decisions can be taken at the meeting with significant changes in the new indirect tax system, simplifying returns, including cutting of GST rates and applying cess on sugar can be considered.
There may be a decision to cut the rate of 40 products of handicrafts, 32 services and 35 items in the meeting. It is believed that the GST Council meeting is likely to decide on the reduction of tax on lithium-ion batteries from 28 per cent to 18 per cent. The government can reduce the GST rate on sanitary napkins, marble, handloom and handicrafts, including water coolers, ice cream machinery etc. Sanitary napkins and most handicraft products currently have 12% GST.
This is the first meeting of GST Council under the chairmanship of Piyush Goyal, after assuming charge of the Finance Minister. In the meeting, setting up of a National Appellate Tribunal in Delhi can be considered. The tribunal will include judiciary as well as tax departments.
In this meeting, a decision can be taken to bring natural gas and jet fuel in the realm of GST. Last year, the GST was implemented on July 1. During this period, five products like petrol-diesel, crude oil, natural gas and jet fuel were excluded. Because of this, bringing these products within the realm of GST was a loss to the Central and the States. Now, if one year has been completed in this arrangement, it can be considered to bring natural gas and jet fuel within its purview.
However, it would be difficult to keep these two products in the rates of GST tax. Because at present, the Center's excise duty on jet fuel is 14 per cent. Apart from this, 30 per cent of states has a sales tax or VAT separately. The maximum tax rate in GST is 28 per cent. In such a case, if aircraft fuel is included in this tax slab, then the states will have a huge loss of revenue. In such a situation, the Center can allow states to put some additional VAT on aircraft fuels.
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