GST 2.0 Reforms: All eyes on 56th meeting as taxpayers await promised pre-Diwali tax relief

As the country awaits clarity on the Prime Minister’s promised “substantial” GST rate cuts before Diwali this year, the GST Council -- headed by the finance minister – is set to meet for the 56th time this week. The upcomig GST Council meeting comes at a time when the country is eagerly waiting for official announcements on the GST 2.0 reforms announced by PM Narendra Modi in his Independence Day speech last month. 

According to sources, a preliminary meeting of state officials commenced on Tuesday, September 2, to discuss the agenda of the upcoming meeting, scheduled to take place over the next two days. 

Consumers are set to benefit from the incoming GST forms in areas like medicines, clothing and footwear. 

Here’s a quick lowdown on various tax proposals on the GST Council’s agenda for its 56th meeting: 

From 28 per cent to 18 per cent 

• Motorcycles up to 350 cc 
• Ambulances and vehicles carrying 10 or more persons
• Petrol, LPG and CNG vehicles with engines up to 1200 cc and under 4000 mm (4 metres) length
• Diesel vehicles with engines up to 1500 cc and under 4000 mm length
• Three-wheelers
• Motor vehicle parts, seats and accessories

To 5 per cent

• GST on fertiliser acids and bio-pesticides (from 18 per cent or 12 per cent)
• Ammonia, sulphuric acid, nitric acid (from 18 per cent) 
• Solar PV cells, solar pumps, windmills, solar power devices (from 12 per cent) 
• Waste-to-energy plants (to be set at 5 per cent)
• Drones (from 18 per cent) 
• Medicines (from 12 per cent) 
• Clothes and footwear priced below Rs 2,500 (from 12 per cent) 

GST to be removed 

• Over two dozen cancer and critical disease medicines

Proposed GST Rate Hikes | From 28 per cent to 40 per cent

• Electric vehicles above 1500 cc and longer than 4000 mm 
• Casinos, online gaming and betting

From 18 per cent to 40 per cent

• One item 

From 28 per cent to 40 per cent 

• 15 items 

From 5 per cent to 18 per cent 

• Coal, briquettes and solid fuels made from coal, lignite and peat

From 12 per cent to 18 per cent 

• Petroleum exploration, mining and drilling (crude and natural gas) 
• Support services for petroleum exploration, mining and drilling
• Clothes and footwear priced above Rs 2,500

ALSO READ: States to get Rs 10 lakh crore in SGST, Rs 4.1 lakh crore via devolution despite rate rejig: SBI Research

Key winner and loser companies and sectors 

According to Zee Business research, the following companies are set to be impacted the most by the incoming GST changes: 

Negative 

• OIL India Ltd 
• ONGC 
• Renewable energy sector companies like Inox Wind, Waaree, NTPC Green and Suzlon

Positive 

• Fertiliser and chemical companies 
• Drone companies 

ALSO READ: GST collections rise 6.5% in August, touch Rs 1.86 lakh crore; April–August up nearly 10%