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Fiscal Developments 83

¾ Various agreements/MoUs were signed by Indian Customs with countries like Maldives,
USA, BRICS etc on various Customs related matters for mutual co-operation. This will
facilitate movement of goods across the countries

B. Union Excise Duties

Retail Selling Price of petrol and diesel in the country are linked to the prices of crude. The
crude prices have been falling in this year. The crude prices have been increasing in last few
months. Indian basket is moving upwards and reached beyond $ 84 per barrel in October, 2021.
The Dollar exchange rate was also on the upward trend and is hovering around ` 75 per USD
which was also impacting the prices of Petrol and Diesel. In this background, Excise Duty on
petrol and diesel was rationalized by Rs 5 per litre on Petrol and ` 10 per litre on Diesel. After
this move, many states and Union Territories have also reduced VAT on Petrol and Diesel to give
relief to the consumers.

C. Goods and Services Tax

GST consolidated a myriad and complex rate structure with multitude of rates, varying with
states, local bodies etc., and with huge cascading into one tax and a simplified procedural regime.
The scale of reform was gigantic and the law and regime evolved in an inclusive way. There has
been extensive participation of all stake holders. Continuous improvements are being made in
an extremely responsive way in GST, with the GST Council responding swiftly, glitches being
addressed quickly, and timely necessary changes being made. A massive exercise of calibration
of GST rates has also been done so as to fix the rates and maintain revenue neutrality. Following
are some of the changes made to GST rates on goods and services during 2021:

¾ In the 45th and 46th GST Council, the recommendation of the Fitment Committee for
calibrating the GST rate structure to correct the inverted duty structure on textiles and
footwear were discussed. Accordingly, it was decided to correct duty inversion in textiles
by prescribing 12 per cent GST for footwear of sale vale exceeding Rs 1000 per pair.

¾ Brick kilns would be brought under special composition scheme with threshold limit of
` 20 lakhs, with effect from 1.4.2022. Bricks would attract GST at the rate of 6 per cent
without ITC under the scheme. GST rate of 12 per cent with ITC would otherwise apply to
bricks.

¾ Services supplied to an educational institution including anganwadi (which provide pre-
school education also), by way of serving of food including mid- day meals under any
midday meals scheme, sponsored by Government is exempt from levy of GST irrespective
of funding of such supplies from government grants or corporate donations.

¾ Services provided by way of examination including entrance examination, where fee is
charged for such examinations, by National Board of Examination (NBE), or similar Central
or State Educational Boards, and input services relating thereto are exempt from GST.

¾ In order to extend the same dispensation as provided to MRO units of aviation sector to
MRO units of ships/vessels, so as to provide level playing field to domestic shipping MROs
vis a vis foreign MROs, the GST on MRO services in respect of ships/vessels was reduced
to 5 per cent (from 18 per cent). The PoS of B2B supply of MRO Services in respect of
ships/ vessels shall be the location of recipient of service.