Jet fuel inclusion in GST at least a year away; relief on auto cess unlikely
The government has indicated that the next wave of goods and services tax (GST) reforms, including adding jet fuel and other petroleum products, will not be taken up for at least a year.
The newly introduced framework needs to stabilise before further changes are considered, Shashank Priya, special secretary and member of the Central Board of Indirect Taxes and Customs (CBIC), said on September 23. He was speaking at the National Conclave on GST 2.0 organised by Assocham.
“The further discussion on reforms of inclusion of ATF (aviation turbine fuel), etc., will not happen before a year, till the dust settles down on GST 2.0 reforms,” Priya said, pushing the timeline for broader reforms to the medium term with immediate focus on automation, refunds, and simplified compliance.
No relief for auto dealers
Under GST 1.0, a compensation cess ranging from 17 to 22 percent was levied on cars, increasing the effective tax incidence on vehicles to between 45 and 50 percent.
Car dealers who purchased vehicles from manufacturers at the pre-reform GST rate of 28 percent plus cess before September 22 will not be able to claim credit for the cess already paid.
Industry estimates put the blocked credit amount at about Rs 2,500 crore. Dealers have sought a mechanism for the refund of this amount.
“We are aware of the issues, but as far as cess is concerned, the government at this stage has no plan to address it by refund or giving credit. I hope the industry will adjust to this. We do not have an immediate quick fix for it,” Priya said in response to concerns raised by industry representatives.
