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GST Council flooded with requests to slash tax rates
August, 16th 2017

From helmets to granite slabs, hybrid cars to namkeen, the GST Council is flooded with requests for tweaking tax rates on a variety of commodities.

The Council, the highest policy making body on Goods and Services Tax (GST), has received requests for changes in tax rates on as many as 133 different products from an array of stakeholders, official sources said.

India moved to a GST regime on July 1 after the Council fixed over 1,200 products in four tax slabs of 5, 12, 18 and 28 per cent.

However, some are not happy with the brackets and have sought changes, sources said.

These include slashing GST on IT products to 12 per cent from 18 per cent as it provides huge employment to skilled persons. On IT hardware, a tax cut from 28 per cent to 18 per cent has been sought.

GST on helmets has been demanded from 18 per cent to 5 per cent, on textiles to nil from 5 per cent, on tractors to 5 per cent from 12 per cent and on granite slabs to 18 per cent from 28 per cent currently.

Namkeen, bhujias and potato chips should attract 5 per cent tax and not 12 per cent as per a demand put before the Council.

Tax cuts have also been sought on sweetmeats, kulfi, wet dates, Isabgol, and a variety of sugar confectioneries like peanut chikki.

Moreover, a request has been made for cut in tax on macaroni/ pasta/noodles to 5 per cent from 18 per cent as vermicelli is taxed at 5 per cent and there should be uniform tax on all products manufactured through the same set of machines and equipment.

A demand has been made to cut tax rate on packaged drinking water sold in small pouches and refill cans with 20 litre capacity to nil from present 18 per cent as GST implementation has seen a sudden rise in their prices.

Also, tax on hair pin, LPG stoves, umbrella, writing instruments, wet grinders, weighing machines compressors, textile machinery parts, chewing tobacco, multi-function printers and handmade carpets comes under the reduction category.

GST on chutney power has been sought at 12 per cent from 18 per cent and on pickle to 5 per cent from 12 per cent.

On motor cycles with engine capacity of more than 350 cc and up to 500 cc, the 3 per cent cess on top of 28 per cent tax rate has been sought to be removed as such vehicles are used for commuting. Also, only Royal Enfield makes vehicles of 350 cc and above and fulfils the ambition of Make in India.

A demand has been made to reduce cess on hybrid cars to 3 per cent from 15 per cent currently. The cess is levied on top of the total tax rate of 28 per cent. The reason behind the demand is that these cars are environment-friendly and are required to be encouraged.

GST on sanitary pads has been sought to be nil from 12 per cent.

Sources said GST Council refers some of the tax change requests to the fitment committee to see if there is any merit in the demands and upon recommendation of the committee takes up for approval any changes.

GST on dried fish has been sought to be cut to nil from 5 per cent, on plastic scrap to nil from 18 per cent, on fishing nets to 5 per cent from 12 per cent, on furniture to 12-18 per cent from current 28 per cent.

The requests also include cutting 12 per cent tax on agriculture implements to nil or maximum 5 per cent, on raw granite to 5 per cent from 12 per cent and on granite finished to 12 per cent from 28 per cent.

A nil duty has been sought for fly-ash and fly-ash bricks from current 18 per cent and 12 per cent, respectively to popularise the use of the otherwise environmental pollutant.

To help cut reliance on imported oil, duty on bio-diesel or bio fuel extracted from non-edible oilseeds has been sought to be cut to nil or 5 per cent from current 18 per cent.

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