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Govt said next phase of GST reforms, including jet fuel & other petroleum products, won’t be taken up for at least a year
GST
The government has clarified that the next phase of Goods and Services Tax (GST) reforms — including the inclusion of jet fuel and other petroleum products — will not be taken up for at least a year.
Shashank Priya, Special Secretary and Member of the Central Board of Indirect Taxes and Customs (CBIC), said on September 23 that the newly introduced GST 2.0 framework must stabilise before further changes are considered. He was speaking at the National Conclave on GST 2.0 organised by Assocham.
“The further discussion on reforms of inclusion of ATF (aviation turbine fuel), etc., will not happen before a year, till the dust settles down on GST 2.0 reforms,” Priya noted, signalling that broader reforms have been pushed to the medium term, with immediate focus on automation, refunds, and simplified compliance.
No relief for auto dealers
Under GST 1.0, a compensation cess of 17–22 percent on cars raised the effective tax incidence on vehicles to between 45 and 50 percent. Dealers who purchased vehicles at the earlier 28 percent GST plus cess rate, prior to September 22, will not be able to claim credit for the cess already paid.
Industry estimates suggest the blocked credit amounts to about Rs 2,500 crore, and dealers have sought a refund mechanism. Responding to concerns, Priya said, “We are aware of the issues, but as far as cess is concerned, the government at this stage has no plan to address it by refund or giving credit. I hope the industry will adjust to this. We do not have an immediate quick fix for it.” His remarks underscore the government’s cautious stance even as the automobile sector continues to press for cess relief.
Focus on automation and compliance ease
Priya said the tax department is preparing automation-driven initiatives to simplify refunds and compliance. From November 1, a new scheme will provide automatic registration within three working days for small taxpayers with Input Tax Credit (ITC) claims up to Rs 2.5 lakh.
Ninety percent of refunds to exporters will also be processed on priority.
In a separate directive, the CBIC has asked field formations to monitor product prices to ensure that reductions are passed on to consumers after GST 2.0 implementation. The anti-profiteering provision, however, has not been triggered.
CBIC is also classifying low-risk businesses to streamline oversight and has written to industry associations and field units to identify areas for simplifying return filing. “I am sure that the return process can be automated to make it simpler. We need to ensure this,” Priya added.
GST 2.0 framework
The new GST regime, effective September 22, has simplified the indirect tax structure into two slabs — 5 percent and 18 percent. While hailed as one of the most significant tax reforms in decades, industry players have raised concerns about product classification, input tax credit structures, and the continuing cess burden.
The GST Compensation Cess, introduced to offset states’ revenue shortfall for five years, has long outlived its original purpose. Its collections are now directed towards servicing pandemic-era borrowings, leaving sectors like automobiles struggling with unutilised cess credit and elevated costs.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
September 23, 2025, 13:40 IST
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