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GST Rates Revised: What Gets Cheaper, What Gets Costlier? Explained

The GST Council on Tuesday approved most of the suggestions on the withdrawal of tax exemptions. The two-day meeting deliberated on the recommendations for withdrawal of GST exemption from various services

New Delhi: The GST Council on Tuesday approved most of the suggestions on the withdrawal of tax exemptions. The two-day meeting deliberated on the recommendations for withdrawal of GST exemption from various services and finalised a list of tweaks and adjustments on various services.

The Council, headed by Union Finance Minister Nirmala Sitharaman and including representatives of all states and UTs, discussed the recommendations of a group of state finance ministers.

Here are the top tweaks and revisions that were discussed in the agendas of the 47th GST Council meeting.

– Increased GST On E-Waste From 5 Per Cent to 18 Per Cent

The council also approved withdrawing the lower rate exception of the tax on E-waste. GST rates hicked to 18 per cent from 5 per cent.

– 12 Per Cent GST on Hotel Accommodations

According to the council, the tax rate of zero per cent shall be replaced by 12 per cent on hotel accommodation of less than Rs 1,000 per unit per day, as this tax exemption was prone to misuse.

– 18 Per Cent GST on Indian Post Office Services

According to the sources, GST Council has approved to withdraw tax exceptions and replace them with the rate of 18 per cent GST on cheques, loose or in book form. Tax exemption on all Indian Post Office services other than postcards, inland letters, book posts and envelopes weighing less than 10 grams shall be taxed.

Increased GST On Petroleum, and Coal Goods To 12 Per Cent From 5 Per Cent

The council approved levying 12 per cent GST on goods related to petroleum/coal bed methane and raising of tax on renewables equipment to 12 per cent from 5 per cent.

Withdrawal of GST Exemption On Various Other Goods and Services

  • The council agreed to withdraw exemption to services provided by RBI, Sebi, IRDAI, FSSAI.
  • GST Council approved the withdrawal of GST exemptions on a number of B2B supplies.
  • Council approved withdrawing GST exemption on storage and warehousing of taxable goods like sugar, and natural fibre.
  • Council approved the withdrawal of exemption on services like fumigation of warehouses.
  • Council approved the withdrawal of exemption to business class air travel for northeastern states.
  • Council approved the withdrawal of exemptions on road and rail transport when such services are input for business.
  • Council approved the withdrawal of exemption on services by way of slaughtering of animals.
  • GST Council disallowed input tax credit refund on account of inverted duty structure in edible oils, and coal. GoM on rate rationalisation had observed substantial refund for edible oils, and coal even though the rate of inputs does not suggest an inversion.
  • GST Council approved replacing the term ‘branded’ with ‘pre-packaged and labelled’ for retail sales to avoid disputes. Council approved continued exemption for food items, cereals sold loose or unlabelled. Branded cereals and food attracts 5 per cent GST currently.
  • Council approved increasing GST on LED lamps, ink, knives, blades, power-driven pumps, and dairy machinery from 12 per cent to 18 per cent.
  • Council approved increasing GST on milling machinery for cereals from 5 per cent to 18 per cent.
  • Council approved increasing GST on the solar water heater, and finished leather from 5 per cent to 12 per cent.
  • GST Council approved increasing rate on work contract services supplied to govt, local authorities to 18 per cent to correct inversion. and correcting inverted duty structure on some items.

– 28 Per Cent GST On Online Gaming, Casinos and Horse Racing

People interested in popular online gaming, casinos and horse racing might have to now pay a flat rate of 28 per cent on these services, as earlier GoM suggested increasing GST on these activities. A final decision shall be announced after tomorrow’s meeting.

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