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Despite high inflation, no major rate cut on GST Council agenda

Despite high inflation, no major rate cut on GST Council agenda

The GST Council is unlikely to finalise a tax levy on virtual digital assets or cryptocurrencies. State ministers of Haryana and Karnataka to study all aspects and submit a paper for the next GST Council meeting on the matter.

A representation image of GST A representation image of GST

Despite high inflation, the upcoming meeting of the federal Goods and Services Tax (GST) Council is unlikely to cut rates on major consumer products like air-conditioners, electronic items, gems and jewellery, ready-to-eat and cook foods, instant food mixes and tobacco products among others.

The existing rate of 18 per cent on such items is set to stay as per the recommendations of the ‘fitment committee’ – a group of tax officials who recommend changes to the rates.

In addition, a proposal to cut the tax rate on branded namkeens from 12 per cent to 5 per cent has also not found favour with the fitment committee.

Interestingly, a proposal to reduce the GST rate is on the agenda. The Himachal Pradesh government has sought a reduction from 18 per cent to 5 per cent on the levy for ropeways used for outdoor activities.

Sources have told Business Today TV that the agenda of the 47th meeting of the GST Council, which is scheduled to be held on June 28-29 28 at Chandigarh, includes a proposal to increase the GST rate on tetra-packs, cartons, boxes and bags from 12 per cent to 18 per cent.

The Council is also slated to consider another proposal to increase the GST rate on cut and polished diamonds from 0.25 per cent to 1.5 per cent.

Sources added that the Council is unlikely to finalise the levy of GST on virtual digital assets or cryptocurrencies. “The fitment committee discussed crypto currencies and non-fungible tokens and their tax treatment. It was felt that the issues involved in the crypto ecosystem need deeper study. State ministers of Haryana and Karnataka shall study all aspects, and submit a paper for the next GST Council meeting,” the source added.