GST Council likely to consider 'zero tax' on millet mix in meeting

Council may maintain status quo on reducing tax rates on EV batteries to 5% from 18%

The Goods and Services Tax (GST) Council, scheduled to meet on Saturday, will take up changes to tax rates on some items, including millet-based product mixes.

The council is likely to consider “zero tax” if the millet product, comprising at least 70 per cent of millet, is sold loose and 12 per cent if it is sold packaged/labelled.

The council’s fitment committee, comprising revenue officials of central and state governments, has recommended a rate revision on these lines, a source privy to the meeting agenda told Business Standard.

The council may maintain “status quo” on reducing tax rates on electric vehicle (EV) batteries to 5 per cent from the current 18 per cent. “EV vehicles generally use lithium-ion batteries which have multiple uses including mobile phone, electronics etc, so the industry proposal of reducing the rates could not be considered,” said the source, citing possible reasons for the move.

The council could defer issues related to tax treatment of some items, in line with a recommendation by the fitment committee.

For instance, the issue of nature and taxability of various supplies with respect to the cryptocurrecncy ecosystem could be shelved, the source said.

Also Read: Gross GST collection rises 10.2% to over Rs 1.62 trillion in September

A long-pending demand by the industry to have clarity on taxing bakery products, particularly on khari and cream roll, could be sent for further deliberations.

Bakery items now attract 18 per cent GST. While toasted items such as rusk, bread falls under the concessional tax bracket of 5 per cent.

Tax treatment of steel scrap is another issue which could be deferred by the council at the meeting.

Industry has suggested levying GST on steel scrap on reverse charge mechanism basis (liability to pay tax is on recipient of goods/services instead of supplier). At present, 18 per cent GST is levied on steel scrap.

Other than these, council may not consider industry proposals seeking exemption from compensation cess on aerated beverages/energy drinks, tobacco products.

Aerated drinks now attract cess at the rate of 12 per cent; while on tobacco, cess rate differs depending on the form of tobacco. Industry had sought uniform additional compensation cess on cigarettes, bidis, smokeless products, and lower rates for cigarettes sticks.

Compensation cess rate levied on tobacco products with declared retail sale price which is linked to retail sale price and is levied at a rate ranging from 8 per cent to 69 per cent.

Maintaining “status quo”
 

On Rate reduction on EV batteries to 5% from 18%

Uniform cess on tobacco products

Concession on cess on aerated beverages/energy drink

Deferred
 

Nature & Taxability of crypto/virtual digital assets

Concessional rate of 5% on khari, cream rolls

Levy GST on steel scrap on RCM basis  

Rate revision
 

Zero tax on Millet-mix, if sold loose, 12% on labelled package

Concessional rate on motor vehicle purchase by visually impaired