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Last Updated : Sep 13, 2019 05:34 PM IST | Source: Moneycontrol.com

GST Council expected to cut tax on auto and biscuits: Report

The council will also discuss reworking the GST structure which might increase the lowest slab to 8 percent from 5 percent.

The Goods and Services Tax (GST) Council is expected to lower tax on automobiles and fast-moving consumer goods (FMCG) sectors at its meeting scheduled in Goa on September 20, reported The Economic Times.

The council might also consider reworking the GST structure to merge the 12 percent and 18 percent slabs and raise the lowest slab to 8 percent from the current 5 percent.

"These proposals will be placed before the council,” said a government official to the daily. The fitment committee discussed the impact of tax cut on revenue the past week and will be placed before the council for a final decision.


Auto sales have fallen in almost all categories with sales lower by 23.55 percent in August alone. The auto sector has been demanding a GST slash to 18 percent for quite some time.

The sector has been facing low demand along with 28 percent GST and a compensation cess amounting between 1 percent and 22 percent. The cess is a consumption levy that aims at compensating the state governments after the GST introduction. While it might also mean a Rs 30,000 crore revenue loss to the government, road transport and highways minister Nitin Gadkari seconds the idea of lower GST on hybrid and other vehicles.

In the FMCG sector, biscuit makers like Parle and Britannia have been demanding a tax reduction to 12 percent from 18 percent in the premium category and 5 percent in the category that costs less than Rs 100 per kg. Due to competition from unbranded varieties and substitutes like rusks being levied a lower tax, demand has been hit.

The government has responded to these demands and the sectors might see some stimulus through a tax cut as it combats the slowdown.
First Published on Sep 13, 2019 05:34 pm