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FM Nirmala Sitharaman busy, GST Council meet pushed back to Saturday

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The meeting, which was to be held through a video conferencing, had a single agenda to boost production of electric vehicles The GST Council meeting, which would have taken up the issue of slashing of tax rates for electric vehicles, was on Thursday rescheduled for Saturday. Union Finance Minister Nirmala Sitharaman, the chairman of the Council, was busy with the ongoing Parliament session, officials said. The meeting, which was to be held through a video conferencing, had a single agenda to boost production of electric vehicles (EVs). The agenda included reduction in GST rate from 12 per cent to 5 per cent for electric vehicles and from 18 per cent to 12 per cent for their chargers. It was also to discuss GST exemption on hiring electric buses. All state finance ministers and officials were logged in for 15 minutes for the meeting at 3 pm before being informed of further delay and a possibility of deferment. In fact, a few finance ministers, mostly from Opposition-ruled states, questioned the urgency to call a meeting for a single point agenda.

“What was the urgency to call a Council meeting for a single-point agenda like EVs? It could have been taken up in the next full-fledged meeting. Besides, discussions are not taking place on relevant issues like the revenue position and compensation,” said Punjab Finance Minister Manpreet Badal, adding that  reducing GST rate in EVs will adversely impact the existing auto industry. Kerala Finance Minister Thomas Isaac also raised a similar question. “What was the need to call this meeting in the first place?” However, he added that although the state will support the Centre's proposal to cut GST on EVs, it was not a good practice to follow. “Cutting GST rates to support any industry was not a good practice. It goes against the spirit of GST.” In a recent letter to Sitharaman, West Bengal Finance Minister Amit Mitra had also criticised the “hurried” manner of placing the EV issue as the single agenda for the meeting.

Business Standard, 26th July 2019

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