The recent GST Council meeting has created anticipation for potential changes in GST rates on various products. Sources have revealed that the Council may refer the issue of GST rates on cigarettes and bidis to the Rate Rationalisation Committee. This move aims to potentially notify a maximum tax rate of 20% under CGST and 20% under SGST, compared to the current 28% rate.
Notably, state Finance Ministers are expected to propose changes to the indirect tax system for the upcoming Union Budget during the forthcoming meeting, reinstating the significance of this upcoming discussion.
Furthermore, there are expectations for significant adjustments in GST rates for multiple products. The Fitment Committee might propose reducing the GST rate from 18% to 5% for aircraft parts/components in aircraft maintenance. Additionally, the GST Council is anticipated to consider reducing the GST rate on carton boxes for packaging apples from 18% to 12%, as well as the GST on solar cookers from 18% to 5%.
Another potential adjustment includes the law committee’s suggestion to exempt the compensation cess of 12% on aerated beverages, indicating a potential shift in this aspect of the tax system.
Additionally, there is growing curiosity among consumers and industry experts about the future of the GST Compensation Cess, initially intended for the first five years of the GST regime starting in July 2017. Talks during the recent meeting, led by the Finance Minister, hinted at a future strategy to introduce an additional cess or surcharge post March 2026, following the expiration of the GST Compensation Cess.
These potential changes and discussions signify an important phase in the evolution of the GST system, reflecting the ongoing efforts to streamline and optimize the indirect tax structure for the benefit of all stakeholders.