Will get fitment panel to look into 28% GST for cement: FM Sitharaman
New Delhi, February 7, 2023
Urges industry to ensure its output is compliant with sustainable development goals, says this is crucial for negotiating non-tariff barriers arising out of environmental concerns around the world
Finance Minister Nirmala Sitharaman on Tuesday indicated that the government could be open to considering a reduction in the goods and services tax (GST) on cement, a long-standing demand of the infrastructure sector, if the GST Council agrees.
At a session with members of the Confederation of Indian Industry (CII) in New Delhi, the finance minister, responding to a recommendation, said she would have a fitment committee look into the existing 28 per cent GST rate on cement – a critical input in construction of everything from houses to bridges.
Feedback Ventures head and infra expert Vinayak Chatterjee, who had made the recommendation, later told Business Standard that this was part of his pre-Budget recommendations to the government. The reduction, if effected, will have an enormous elasticity impact on the government’s revenues and boost it further, he said.
“On GST for cement, your point is taken. I will have the fitment committee look at it,” Sitharaman told the industry body members.
The bigger theme at the session, however, was the finance minister once again exhorting Indian industry to make sure all its output is compliant with sustainable development goals (SDGs). "This would be essential for negotiating non-tariff barriers arising out of environmental concerns around the world, should they crop up," she said.
At the same time, she commended the industry for starting to think more holistically and not just be concerned with their own sectors. “Post-Covid, industry is looking at India more holistically… I find this shift healthy,” Sitharaman said.
“Indian industry has to come up with ideas, talk to the government. Lift up our thinking,” Sitharaman said, advising industry to make sure their products do not face non-tariff barriers. This, she said, was the challenge in the post-Covid world.
“The industry has to be SDG compliant, will have to produce green goods and ensure that inputs are green compliant and guided by green considerations. You will have to make the transition from using fossil fuel to green fuel. All this will have to happen at this time and not be delayed,” she said.
In December too, the finance minister had cautioned Indian industry of impending cost to sectors such as steel from non-tariff walls being raised by developed economies and sought suggestions on how the government could help in the green transition of such sectors.
Without naming the Carbon Border Adjustment Mechanism (CBAM), agreed upon by the European Union, she had said there were countries that wanted to fund their transition from not so green to green production of material for items like steel by raising tariff walls against countries that sent their products as a matter of normal export.
On Tuesday, the finance minister also invited suggestions on what could be done beyond the performance-linked incentive (PLI) scheme for sunrise sectors.
“PLI is a good scheme for sunrise sectors. But beyond that, what can we do to provide you with a leapfrogging effect?” she said.
Sitharaman said that coming up with new technology and solutions for the industry will have cost involvement for which the centrecan help or arrange loans but industry will have to work collectively to see how best the various sectors can take these forward.
Sitharaman travels to Hyderabad next as part of her customary post-budget outreach to interact with regional industry bodies, businesses and other stakeholders.
[The Business Standard]