Cement GST Revision to be discussed by Fitment Panel
The Central Board of Indirect Taxes and Customs ( CBIC ) Chairperson, Vivek Johri, announced that a committee of central and state officers will examine suggestions for a tax rate reduction on cement for the Goods and Services Tax ( GST ) Council's consideration. The next meeting of the GST Council is scheduled for February 18, where legal and Tax rate-related issues already reviewed by...
The Central Board of Indirect Taxes and Customs ( CBIC ) Chairperson, Vivek Johri, announced that a committee of central and state officers will examine suggestions for a tax rate reduction on cement for the Goods and Services Tax ( GST ) Council's consideration.
The next meeting of the GST Council is scheduled for February 18, where legal and Tax rate-related issues already reviewed by the fitment committee will be discussed. However, the issue of reducing the tax rate on cement is not expected to be discussed during the upcoming meeting.
Mr. Johri mentioned that the Finance Minister has suggested discussing the 28% GST on cement. The fitment committee will review this issue, and their recommendations will be presented to the Council for further discussion. The construction industry is pushing for a reduction in the tax rate on cement as it will reduce project costs.
Lowering the GST on cement is being considered at a time when India is focusing on infrastructure-led growth, with the government planning to spend ₹10 trillion in capital expenditure in FY24 to boost the economy, create demand, and add more jobs.
The highest slab of 28% GST on cement is particularly burdensome for individuals building homes as they do not receive any tax credit for the GST paid on cement. Developers, on the other hand, only receive credit for taxes paid on raw materials for under-construction properties, making taxation efficient on the sale of flats to consumers. A tax rate reduction would benefit consumers and the government's capital spending.
Johri informed new revenue service officers that the tax authority is targeting revenue collection of ₹13.85 trillion and ₹15.29 trillion in FY23 and FY24, respectively. The taxpayer base has risen from 5 million to 14 million since the implementation of GST.
The strategy has always been to balance enforcement and taxpayer facilitation, according to Johri, and the tax authority has successfully scaled up return filing compliance, with almost 90% of all registered entities filing monthly Tax returns.
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