FTCCI Welcomes GST Reforms, Urges Inclusion of Petrol and Diesel

Quick Summary

• The Federation of Telangana Chambers of Commerce and Industry (FTCCI) welcomed the recent GST rate rationalization as a step toward a simpler, inclusive tax regime.
• FTCCI advocated for the inclusion of petrol, diesel, aviation turbine fuel (ATF), and natural gas under the GST framework to eliminate cascading taxes from varying state VAT/sales tax rates.
• FTCCI suggested introducing higher optional GST rates allowing input tax credit (ITC) for B2B transactions in hospitality to maintain seamless credit flow.
• Concerns raised by FTCCI include:

– Sharp GST hike on coal from 5% to 18%, posing challenges for energy-intensive sectors like steel and cement.
– Exclusion of petroleum products from GST stunting competitiveness in logistics and manufacturing sectors reliant on energy inputs.
– Reduction in hotel accommodation GST (up to ₹7,500/day) to 5% without ITC removing seamless input tax benefits; a dual-rate option was proposed instead.

• Welcome measures include corrections like reducing cement’s slab rate from 28% to 18%, lower GST on fertilizers, enhanced export refunds provisioned at 90%, revised duty structure on man-made textiles, reduced compliance burden, and better support for msmes via faster refund cycles.
• CII Telangana highlighted benefits for msmes with improved cash flows due to streamlined compliance systems under “GST 2.0,” possibly spurring growth across various sectors.

Indian Opinion Analysis

The recent reforms as praised by trade bodies like FTCCI emphasize progress toward achieving greater efficiency in India’s indirect taxation system. Though,key contentious points remain unresolved – particularly the exclusion of petroleum products under the ambit of GST. This remains a fundamental challenge affecting industries with high energy demands and transportation costs due to cascading taxes.

the concerns over increased coal-related taxes also indicate possible inflationary effects across core manufacturing sectors such as steel or aluminium – critical pillars sustaining industrial demand domestically.Advocacy around uniform classification rules seeks clarity essential for preventing disputes while making long-term structural adjustments smoother.

By simplifying refund claims processes alongside offering targeted reliefs that address burdens faced by MSMEs or global-export-linked supply chains directly-GST reforms back systemic scaling objectives aligning micro-enterprises operationally interstate-wide barriers breaking bureaucratic inconsistencies signals better predictable implementing overall fair transparent ecosystem principles emerge helpful stakeholders middle-income beneficiaries alike broadly fairness upfront adaptability strengthen ‘economic foundation pathways yet.’

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