Nirmala Sitharaman: Not apt time to bring petro goods under GST

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New Delhi: Meeting in-person for the first time after two years, the GST Council on Friday reduced or waived cess on a large number of critical-use medicines, but decided that this wasn’t the right time to bring petrol and diesel under the GST.

The council also agreed that compensation cess, which is over and above the GST, will continue to be collected on alcohol, tobacco products, large vehicles, coal and aerated water till March 2026 “for the specific purpose of repayment of loans taken” to pay states, said Finance Minister Nirmala Sitharaman at a media briefing in Lucknow. “There has been a lot of media speculation on whether petroleum products will be brought under the ambit of the GST. I make it absolutely clear that this came on today’s agenda purely because of the Kerala High Court order.

“Members made it clear they do not want petroleum products to be included under the GST. It was decided, we will report to Kerala HC that matter has been discussed and the council felt it was not the time to bring petroleum products under the GST,’’ said the minister.

The GST was also reduced as part of “people friendly” decisions on retro-fitment kits for vehicles used by the differently abled and fortified rice kernels, which can be used in social sector schemes.

The life-saving drugs given exemption are not connected with Covid, but are very expensive. For Covid medicines, the extension has been given till the year-end. But the extension for medical equipment related to Covid has ended.

In the transport sector, one-year extension has been given for export by vessels and air because of glitches in the GST portal. The National Permit Fee has been exempted from the GST. The IGST payable on import of leased aircraft has been exempted from double taxation but GST on railway parts and locomotives will be increased to correct the inverted duty structure. The same has been done for the footwear and textile sectors but deferred for ores, specified metals.

One Group of Ministers has been set up to look at issues related to anomalies in rate structure and another will examine issues of e-way bills.

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