Consumers may have to fork over more money starting on July 18 as a result of the GST Council’s approval of a rate increase to address inverted duty structures and the withdrawal of some exemptions.
Any increase in GST rates, according to finance minister Nirmala Sitharaman, is meant to make up for “inefficiencies” in the value chain.
The minister had claimed that no state was opposed to rate changes. The Fitment Committee’s recommendations to the GST Council were fully taken into account, she said, and most of them were approved.
The following items will increase in price:
- Food products like cereal, pulses, and flour sold in single packages weighing up to 25 kg will be deemed “prepackaged and labelled” and subject to a 5 percent GST. Other goods like curd, lassi, and puffed rice would also be subject to GST, which is charged at a rate of 5% when they are pre-packaged and labelled.
- Printing, writing, or drawing ink, knives with cutting blades, paper knives, pencil sharpeners and blades, spoons, forks, ladles, skimmers, and cake servers are additional items that will cost more. Instead of attracting 12 percent, these items would now draw 18 percent.
- Solar water heaters and LED lighting will be subject to an 18% tax.
- Instead of 12 percent GST, Tetra Pak (or aseptic packaging paper) used to package liquid beverages or dairy products will now be subject to 18 percent GST.
- Diamonds that have been cut and polished will now be taxed at 1.5 percent rather than the previous 0.25 percent.
- Up to Rs 1,000 per day of hotel lodging will now be subject to a 12 percent tax.
- Non-ICU hospital rooms with room rent exceeding Rs 5,000 per day will be subject to a 5% GST.
- The Goods and Services Tax (GST) rate will be 18 percent for bank chequebooks and loose leaf checks and 12 percent for globes, atlases, and maps.
- The rate on “pawan chakki” or air-based atta chakki, wet grinders, machinery used in the milling industry, and machinery used to work with grains, pulses, and other items goes up from 5 percent to 18 percent.
- Rates for milking machines and dairy equipment will increase from 12 percent to 18 percent. Rates for machines that clean, sort, or grade eggs, fruit, or other agricultural produce and its parts will also increase.
- The provision of such services by an individual is the only scenario in which training or coaching in recreational activities connected to the arts, culture, or sports is exempt from tax.
- The following services are no longer exempt: renting residential space to business entities (registered persons), providing services by cord blood banks to preserve cord blood, transportation of railroad equipment and materials by rail or vessel, storage or warehousing of tax-exempt goods (nuts, spices, copra, jaggery, cotton, etc.), fumigation of agricultural produce in a warehouse, services by the RBI, the IRDA, the SEBI, and the FSSAI, and GSTN.
Cost is reduced for:
- Tax on NSE 1.55 percent goods and passenger transport by ropeways would drop from 18 percent to 5%.
- Renting a truck or goods carriage where the cost of fuel is included will be less expensive because the tax has been lowered to 12 percent from 18 percent.
- GST rates on medical items like intraocular lenses, ostomy and orthopaedic appliances, splints and other fracture aids, artificial body parts, and other aids worn, carried, or implanted in the body to correct a defect or disability have decreased from 12 percent to 5 percent.
(With help from agencies)