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Key decisions likely to be taken at the GST Council meeting on Friday

The GST Council on September 20 could take key decisions to reverse the economic slowdown.

Hotels and Outdoor catering:

GST Council is likely to rationalize applicable rates on hotels and outdoor catering segments with the aim to boost to the tourism industry. The fitment panel recommended a rate cut for outdoor catering from 18 percent to 5 percent, but without the input tax credit.

It is expected that the GST Council will reduce the GST rates applicable to luxury hotels-with rates up to Rs 10,000-Rs 12,000 night-to 18 percent.

Automobile sector:

The automobile sector, which has been hurt by the economic slowdown, has demanded a reduction on GST rates on vehicles from 28 percent to 18 percent.

However, the auto sector is unlikely to get any relief as GST collection as the auto sector contributes almost Rs 50,000 to Rs 60,000 crore of total GST collections and any reduction in rates will adversely impact the government revenue.

Biscuit Manufacturing companies (FMCG):

India’s biscuit manufacturing unit is also hoping for some relief during the upcoming GST meeting.

Match sticks:

The panel also recommended rate rationalization for match sticks.

Lottery rates:

The meeting is likely to have a debate over lottery rates, where the Centre pushing for one rate and Kerala batting for the continuation of the current dual structure.

Author: Niranjan Reddy

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