Fitment committee refuses industry's demand to reduce GST on EV batteries, tobacco products: Report

The committee has proposed maintaining the current rates leading up to the Council meeting on October 7, it said, citing sources.

The industry had called for a consistent additional compensation cess on various tobacco products and a reduced compensation cess on cigarette sticks up to 70 mm.

It had requested a decrease in GST on electric vehicle (EV) batteries from 18 percent to 5 percent.

Tobacco products like cigarettes, chewing tobacco, and gutkha are subject to GST, Compensation Cess, Basic Excise Duty, and National Calamity Contingent Duty (NCCD). Bidis, on the other hand, are subjected to GST, Basic Excise Duty, and NCCD.

While both cigarettes and bidis have a GST rate of 28 percent, bidis do not have an additional cess, and this remains unchanged.

The Compensation Cess for tobacco products is determined by the retail sale price and varies from 8 percent to 69 percent.

In the Union Budget 2023-24, the NCCD rate for specific cigarettes was increased by approximately 16 percent starting from February 2, 2023. This adjustment is anticipated to lead to higher GST collections.