Expectations from 36th GST Council Meeting

1. Conclusive call on rate reduction for electric vehicles

Fitment committee will place its report on the feasibility study at the 36th GST council meeting. Currently, the GST rate for electric vehicles is 12%. In addition to this, the GST charged for the hiring of electric vehicles can be brought down from 18% to 5%.
The government presently charges a tax rate of 28% on the vehicles that run on petrol and diesel. The use of electric vehicles across India is still at a nascent stage. Enough incentives for the manufacturers would help boost supply and in turn, the demand for the same. The tax incentives for buying electric vehicles can encourage demand for electric vehicles.
However, the prices of electric vehicles are on an average basis higher than the price of vehicles run on petrol. Also, the lack of infrastructure across India to set up enough charging booths or points need to be looked. We can expect the industry to take sufficient time of around three years for acceptance among Indians.

2. Council may also look at the tax treatment of lotteries

The long-pending issue of the differential tax treatment of lotteries between state-owned and state-authorised lottery players is discussed at 36th GST council meeting. The Council, in its previous meeting, had decided to seek a legal opinion of the Attorney General to determine the tax structure for lotteries. The principle reason for deferring the decision is due to the differential tax treatment within a State. It is in contradiction to Article 304 of the Constitution of India.
The GST rate charged for lottery schemes authorised by State Government is at a higher 28% compared to the ones run by State Government, which is taxed at 12%. Whether the disparity in the tax structure for the same product/commodity be continued or a uniform rate be prescribed for both will be decided at 36th GST Council meeting.
Other decisions on GST rate cuts like solar power projects cannot be completely ruled out. Since it is a short meet, we expect no significant decisions in 36th GST council meeting apart from the ones given above.

Read through the decisions taken and those that were deferred through the highlights of last 35th GST council meeting.