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GST Council may reject demand to reduce GST rate on over 200 items: Report

A ministerial panel will meet next week to discuss the proposed changes in the goods and services tax (GST) rate for over 200 items. The panel of government officials has proposed a change in GST rate for several items, including tetra-packs, even as it rejected demands for a reduction in levy over 200 goods and services to ease the inflationary burden on consumers, a Business Standard report said.

The government committee may ask the states of Haryana and Karnataka to study the nature and taxability of various activities in the crypto ecosystem. “During the meeting, it is likely to consider the recommendations made by the fitment committee, which also proposes an increase in the GST rate for tetra packs to 18%, from 12% at present. The Council’s fitment committee, which comprises revenue officials from Centre and states, recommended increasing GST rate on tetra packs to bring uniformity in tax structure with respect to other substitutes, such as cartons, plastic bottles, sachets and pouches and plastic cups,” the report said. 

Additionally, the committee recommended the GST Council clarify that electric vehicles will attract 5% GST and that specified defence items imported by private entities when the end-user is defence forces should be exempt from IGST. 

The government panel is meeting for two days starting June 28 in Chandigarh and it is unlikely to finalize a rate in the upcoming meeting but discussions may be held on placing it in the highest tax slab of 28%, the people said.

The panel, comprising central and states’ finance ministers, is seeking to broaden the tax net to track dealings in virtual digital assets in a more effective manner, the people said.

Meanwhile, earlier this year, Finance Minister Nirmala Sitharaman imposed a levy of 30% on income from transfer of virtual assets and a 1% tax at source on all crypto transactions in a bid to assess the size of crypto market in the country and track users. The move was seen as removing uncertainty about the legal status of crypto transactions. However, there is still no clarity on imposition of a sales tax on digital currencies due to ambiguity in its treatment as goods or services and a lack of a regulatory framework.

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