City-based oil merchants have urged commercial taxes minister P Moorthy to recommend to the GST Council to reduce the 12% GST on lamp oil to 5%, considering that it is nothing but a mixture of many oils which are taxed only 5%. Madurai Oil and Oil Seeds Association stated that lamp oil could be divided into scented and unscented categories for GST.
The association in its petition pointed out that non-scented lamp oil is manufactured by mixing refined rice bran oil, castor oil, coconut oil, gingelly oil, refund palm oil, pungam oil, refund sunflower oil and mahua oil. All these varieties are taxed at only 5% but lamp oil is taxed 12%. The right approach would be tax the scented lamp oil at 12% because scents and fragrances are taxed 12% and 18%. The association said that averaging out taxes on scents, the scented lamp oil could be imposed 12% GST.
The association also urged the minister to recommend reducing GST on ghee from 12% to 5% since it is food item. Ever since GST was introduced seven years ago, there have been conflicts and confusions in the taxation system. As a result, there are numerous cases and penalties on the trading community. Just as the state govt introduced a samadhan scheme to collect arrears by waiving off penalties, it could urge the GST council to compe up with a similar scheme for GST which will be of great relied to the traders, the association added.
Source: The Times of India
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