GST Council hikes tax on caffeinated beverages cuts rates on hotel tariffs

first_imgPanaji: The all-powerful GST Council on Friday more than doubled the tax on caffeinated beverages but slashed the same on hotel tariffs and some goods with a view to addressing sectoral concerns in a slowing economy. The GST Council, headed by Union Finance Minister Nirmala Sitharaman and having representatives of all states, however, did not take a decision on cutting tax on automobiles as well as items like biscuits which had seen fall in sales on slowing consumption and demand. Also Read – Commercial vehicle sales to remain subdued in current fiscal: IcraSitharaman said caffeinated beverages will be charged with 28 per cent tax plus a 12 per cent compensation cess in place of the current tax rate of 18 per cent. This will bring them at par with the tax rate charged on aerated drinks. Also, aerated drink manufacturers have been excluded from the composition scheme and restrictions placed on refund of compensation cess on tobacco products. To boost job-creating hospitality industry and tourism, the GST (goods and services tax) on hotel rooms with tariffs of up to Rs 1,000 per night will be nil. The same for tariff of between Rs 1,001 and Rs 7,500 per night has been cut to 12 per cent from the existing 18 per cent. Also Read – Ashok Leyland stock tanks over 5 pc as co plans to suspend production for up to 15 daysSimilarly, the tax on room tariff of above Rs 7,500 has been slashed to 18 per cent from the existing 28 per cent. Passenger vehicles of engine capacity 1,500 cc in case of diesel, 1,200 cc in case of petrol and length not exceeding 4,000 mm designed for carrying up to 9 persons attract compensation cess of 1 per cent for petrol and 3 per cent for diesel vehicle over and above the 28 per cent tax rate. Council recommended same compensation cess rate for vehicles having these specifications (length and engine capacity) but designed for carrying more than 10 persons but up to 13 persons, she said adding presently these vehicles attract compensation cess at the rate of 15 per cent. In all, the GST Council revised rates on 20 goods and 12 services. Sources said the changes will have “very minor” revenue implication as an increase in tax would make up for reductions. The Council cut the GST rate on slide fasteners (zips) to 12 per cent from 18 per cent on marine fuel to 5 per cent from 18 per cent on wet grinders to 5 per cent from 12 per cent and to nil on dried tamarind and plates and cups made up of leaves/flowers/bark from current 5 per cent. Also, the GST was cut to 0.25 per cent on cut and polished semi-precious stones from present 3 per cent. A 5 per cent GST would be applicable on specified goods used for oil and gas exploration and production under the licensing policy. She said import of specified defence goods not being manufactured indigenously, the supply of goods and services to FIFA for organising under-17 Women’s Football World Cup in India, and supply of goods and services to Food and Agriculture Organisation (FAO) for specified projects in India has been exempt from GST. A uniform GST rate of 12 per cent on polypropylene/polyethylene woven and non-woven bags and sacks used for the packing of goods will be levied in place of present rates of 5 per cent/12 per cent/18 per cent, respectively. The Council exempted fishmeal as well as pulley, wheels and other parts for agricultural machinery from GST for specified periods. The minister said the rate changes shall be made effective from October 1.last_img read more

Govt plan to privatise BPCL needs Parliament nod

first_imgNew Delhi: The government is considering a proposal to sell India’s second-largest state refiner and fuel retailer BPCL to foreign and private firms but the privatisation plan will need a prior nod of Parliament, officials said. Keen to get multi-nationals in domestic fuel retailing to boost competition, the government is mulling selling most of its 53.3 per cent stake in Bharat Petroleum Corporation Ltd (BPCL) to a strategic partner, officials aware of the development said. Privatisation of BPCL will not just shake up fuel retailing sector long dominated by state-owned firms but also help meet at least a third of the government’s Rs 1.05 lakh crore disinvestment target. Also Read – Commercial vehicle sales to remain subdued in current fiscal: IcraBPCL at the close of market on September 27 had a market capitalisation of about Rs 1.02 lakh crore and even a 26 per cent stake sale at this valuation would fetch the government Rs 26,500 crore plus a control-and-fuel-market-entry premium ranging anywhere between Rs 5,000 crore to Rs 10,000 crore, officials said. BPCL privatisation, however, will need Parliament’s approval. The Supreme Court had in September 2003 ruled that BPCL, as well as Hindustan Petroleum Corporation Ltd (HPCL), can be privatised only after Parliament amends a law it had previously passed to nationalise the two firms. Also Read – Ashok Leyland stock tanks over 5 pc as co plans to suspend production for up to 15 daysThe ruling had followed a plan of the then BJP-led NDA government headed by Prime Minister Atal Bihari Vajpayee to privatise the two firms. The apex court ruling had stalled the plan to sell 34.1 per cent out of government’s 51.1 per cent stake in HPCL to a strategic partner along with management control. Reliance Industries Ltd, BP plc of UK, Kuwait Petroleum, Petronas of Malaysia, the Shell-Saudi Aramco combine and Essar Oil had expressed their interest in acquiring that stake before the Supreme Court stalled the process. Officials said BPCL in present times will be an attractive buy for companies ranging from Saudi Aramco of Saudi Arabia to French energy giant Total SA which are vying to enter the world’s fastest-growing fuel retail market. BPCL was previously Burmah Shell, which in 1976 was nationalised by an Act of Parliament. Burmah Shell, set up in the 1920s, was an alliance between Royal Dutch Shell and Burmah Oil Co and Asiatic Petroleum (India). HPCL was incorporated in 1974 after the takeover and merger of erstwhile Esso Standard and Lube India Ltd through the ESSO (Acquisition of Undertaking in India) Act passed by Parliament. The company was in January last year taken over by state-owned Oil and Natural Gas Corp (ONGC) for Rs 36,915 crore. At that time, Oil Minister Dharmendra Pradhan had cited the four-decade-old Nationalisation Act to justify exempting ONGC from making an open offer after acquiring the government’s 51.11 per cent stake in HPCL. “We are bound by the Nationalisation Act and character of HPCL could not have changed so no open offer was mandated,” he had said. The Supreme Court had in September 2003 cited the ESSO (Acquisition of Undertaking in India) Act and the Burmah Shell (Acquisition of Undertaking in India) Act, 1976 and Caltex (Acquisition of Shares of Caltex Oil Refining India Ltd and all the Undertakings in India for Caltex India Ltd) Act, 1977 to rule that the government cannot privatise HPCL and BPCL without approaching Parliament for changing the Nationalisation Act.last_img read more