GST Council's fitment committee rejects rate cut on over dozen items; defers call on uniform cess on tobacco products

Oct 4, 2023

The Fitment committee of the Goods and Services Tax (GST) Council has recommended the exemption of goods and services GST on powdered millet sold in loose form where 70% millet is used. It has recommended 12% GST for millets sold in prepacked and branded form. The committee refused to give any incentive for prepared produce made out of millet.

The recommendation of the fitment committee will be taken up in the next GST council meeting scheduled on October 7.

The council may not go for a major rate rejig as the fitment committee has rejected the proposal to reduce the GST rate on over one dozen items including on lithium-ion batteries used in electric vehicles (EV) to 5% from 18% and recommend status quo.

The EV industry had sought a reduction of GST on batteries from 18% to 5%, however, the fitment committee has recommended maintaining a status quo on the rate.

The committee also took no decision on the GST rate on scrap iron and steel as it felt more discussion is required and it is expecting a report on the same by a sub-committee.

The fitment committee, which comprises revenue officials from both the Centre and states also deferred decision on imposing uniform cess on cigarettes and bidi, as the industry said that the current cess system is not uniform.

ITC's share price saw a dip after industry sought movement in cess on tobacco before eventually recovering. As of 2:55, shares were trading down 0.5 per cent.

The fitment committee also deferred decisions on exemption sought by flying training institutes on the line of marine institutions saying that the decision will be taken by the committee on rate rationalisation.

[The Economic Times]