The A.P. Chambers of Commerce and Industry Federation on Tuesday (October 21, 2025) said that the Union government’s GST 2.0 reforms had positive impact on the middles class. However, there are certain issues that need to be reconsidered following decisions of the 56th GST Council meeting.
In a representation submitted to the GST Council Chairperson Nirmala Sitharaman, president of the Chambers P. Bhaskara Rao sought reduction of GST on fruit pulp-based beverages. He said carbonated beverages of fruit drink or carbonated beverages with fruit juice have now been placed under 40% GST rate (including cess). “This classification inadvertently covers a large number of fruit pulp-based beverages manufactured by medium and small scale industries across India, particularly in agrarian states like Andhra Pradesh, Tamil Nadu, and Maharashtra.
Mr. Bhaskar Rao appealed for reduction of GST to 18%, aligning with other processed food products.
On denial of Input Tax Credit (ITC) to the hospitality sector under GST 2.0, he said though the GST rate for rooms with tariff up to ₹7,500 has been reduced from 12% to 5%, but the corresponding withdrawal of Input Tax Credit (ITC) has created severe financial hardship to hoteliers and tourism operators.
He requested the government to permit ITC or provide a refund mechanism for accumulated input credits to avoid cascading of taxes and maintain parity in effective tax incidence for the hospitality industry.
Referring to cess on automobiles, he said after implementation of GST 2.0 from September 22, 2025, compensation cess on automobiles had been abolished. “However, automobile leaders across the country are holding significant inventories purchased prior to this date, on which cess has already been suffered and capitalised in their cost,” he said, adding since subsequent outward supplies do not attract cess, the cess portion paid on inward supplies remained unutilised and irrecoverable, resulting in financial loss to the dealers.
He appealed to the Union government to allow refund or adjustment of accumulated cess paid on pre-September 22, 2025, inventory, or alternatively, permit passing of the equivalent benefit to customers without adverse tax implications.
Mr. Bhaskara Rao also appealed for reduction in GST on business exhibition participation and membership fees on industry bodies and NGOs from 18% to 5% and steps to address operational and procedural issues in GST implementation.
Published – October 21, 2025 10:29 pm IST
