All eyes are set on the 45th Goods and Services Tax (GST) Council meeting to be held in Lucknow on Friday. The key agenda of the meeting is how to bring diesel, petrol and other petroleum products in the ambit of GST.
This is the first time in 20 months that the GST council will be doing any physical meeting. After December 18, 2019, all the GST Council meeting was done in virtual mode.
Sources toldthat a discussion to bring petrol and diesel and other petroleum products in the ambit of GST will be the core focus of the meeting on Friday.
"To correct the inverted duty structure and plug-in the administrative leakages and to extend the duty relief available on Covid-19 essentials are some of the other agenda of tomorrow's meeting," said sources.
In the previous meeting held on June 12 tax rates on various Covid-19 drugs and essentials were reduced till September 30.
Tax experts said that seeing the current situation with respect to the Covid-19 situation, bringing petro products under GST will be a very tough call for both the Centre and states "as both will stand to lose".
Rajat Bose, Partner, Shardul Amarchand Mangaldas and Co said, "Bringing petrol and diesel in the ambit of GST will help the industry as it will reduce the cost. Right now consumers are bearing both value-added tax (VAT) and excise duty but once it is brought under GST it will bring the prices down."
"It is a difficult task for Council as many states may not agree to this proposal as this is the major source of revenue for the states. If it is brought in GST ambit then they will have to share this with the centre," he said.
Bose said that currently, some sectors like textile, footwear, solar and pesticides are suffering from inverted duty structure as their output tax is less but they are paying more GST for raw materials.
Anil Gupta, Managing Director of Okaya Power Group said GST has been 5 per cent on electric vehicles, but for items like batteries, electronics charges we have to pay a GST of 18 per cent.
"It would be great if the GST Council may rectify this inverted duty structure. We welcome whatever decisions are going to come in favour of the entire electric vehicle industry," Gupta added.
( With inputs from ANI )
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