In its meeting this month before the Union Budget announcement on July 5, the GST Council is likely to review the GST rate structure and bring down the rate for some of the items placed within 28% tax slab. The GST Council, which is scheduled to meet on June 20, will be for the first time headed by Nirmala Sitharaman, the country's newly appointed women finance minister.
For items attracting the highest GST rate of 28% such as auto parts and cement, the industry has been demanding a rate cut. In an ET report, a senior government official has been cited as saying that few of the states have been favouring the reduction of tax as slowdown concerns loom. The report further quoted the official saying, "Something needs to be done urgently-demand slowdown is quite visible. It could get further entrenched... Jobs are getting impacted."
GST of 28% on automobiles pushed the price of products in the category higher, which thus impacted its sales. In April, sales of passenger vehicles registered the steepest fall in as many as 8 years due to weak customer sentiment on account of a liquidity crisis as well as high product prices. Thus slowdown-hit auto industry demands a reduction in GST on all vehicles from 28% to 18%.
The Council in its meet will also focus on the merger of the 12% and 18% tax slabs in the medium term and may also consider ease of filing taxes, e-invoice etc.