The demand to reduce the GST rate on cement from 28 per cent to 18 per cent is likely to be referred to the GoM on rate rationalisation at the next meeting of the GST Council.
The GST Council in its July 11 meeting is also expected to name a new convener for the GoM on rate rationalisation following former Karnataka chief minister Basavaraj Bommai ceding that position after the elections in the state.
The Council might reconstitute the GoM with a new convenor, which will be asked to file a report that could be taken only after the general elections next year.
The GST on cement is in the highest slab of 28 per cent, with home builders denied tax credits for the use of the material.
Developers get the credit only in the case of under-construction properties.
In construction-completed properties, there is no GST liability, and the tax on raw materials gets embedded into the property’s price.
Cement is classified under the 28 per cent tax slab, with an additional cess of 12 per cent, taking the total GST rate for cement products to 31.36 per cent
Officials said GoM needed to look at revenue losses from any shift to a lower tax bracket.
According to some estimates, moving out from the highest slab would result in significantly lower revenues.