The Union Finance Minister, Smt Nirmala Sitharaman, stated on Tuesday that the Ministry and the GST Council would review the GST levy of 28% on the cement supply in India.
The Hon’ble FM also mentioned that the government is managing whatever new developments emerge from global factors for the cement industry. The Union FM interacted with various industrialists at a gathering of the Confederation of Indian Industry (CII). She was quoted saying, “Did the budget have any buffer? Whether or not a buffer was present, all must face the situation as it occurs”.
The FM further said that the government acted when the price of fertilisers rose in 2021 without any hint. However, she stated that the government did not leave the farmers to struggle by importing the necessary quantity without shifting the burden on them. All this was done without provisioning for it in the Budget.
Shri Vinayak Chatterjee, an infrastructure sector veteran, suggested reducing the GST rate on cement from 28% to a lower rate. He further reasoned that the present rate is unnatural, considering that individual buyers unable to purchase in bulk cannot claim input tax credits. He also pointed out that lowering the rate on construction materials will reduce the cost of government infrastructure projects as higher volumes will ensure revenue buoyancy is not affected.
Smt Nirmala Sitharaman responded affirmatively to this suggestion. She also stated that the government and fitment committee would consider reviewing the GST rate on cement and table its report before the GST Council.
As per a leading foreign brokerage firm, Jefferies, any GST cut from 28% to 18% lead to a 7 to 8% drop in the cost of construction and, in turn, the price charged to the customers. It will be a positive move in the medium term. The FM’s address led to a rise in the stock prices of big players in the cement industry, such as JK Cements, Ultratech Cement, Ambuja Cements, and Ramco Cements, by 1 to 2% on the next day.
On the other hand, there are speculations that the upcoming 49th GST Council meeting will be pushed to a later date in March 2023 since a few state FMs are busy with state Budget presentations. However, the CBIC Chairman, Shri Vivek Johri, indicated that the fitment committee is already studying the issue of the GST rate on the cement and is meeting soon to decide on the revised rate.
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Annapoorna, popularly known as Anna, is an aspiring Chartered Accountant with a flair for GST. She spends most of her day Singing hymns to the tune of jee-es-tee! Well, not most of her day, just now and then.
