Hotel rooms

From prepackaged food products to hotel rooms; List of items that are getting expensive starting today

The decision was taken last month at the 47th meeting of the GST, chaired by Finance Minister Nirmala Sitharaman and attended by her state counterparts when they reduced the exemption list and levied a tax on a variety of goods and services.

The government has now notified that all clinical facilities will be required to pay a tax on gross room rents exceeding Rs 5,000 per day.

Customers will have to pay extra for household goods, financial services, hospitals and hotels as the Goods and Services Tax (GST) Board’s ruling will take effect from Monday. Prices for some essential goods and services, including pre-packaged and labeled food items and hospital rooms, will increase starting today.

The Council also eliminated duty reversal for commodities when input taxes were higher than output taxes.

“Specific pre-packaged and labeled products (without registered brand names) such as wheat, rice, maize, makhana, specified flours, etc. would be subject to 5% GST from July 18, 2022, which would increase the cost to the user,” said Saurabh Agarwal, tax partner at EY India.

“It is essential that industry investigate whether specified prepackaged goods are subject to declaration under the Legal Metrology Act 2009,” Agarwal added.

List of items that will become expensive

  • Customers would have to pay 5% GST on pre-packaged and labeled food items such as atta, paneer and curds.

  • A 5% GST will also be applied to hospital rooms with rent above Rs. 5,000.

  • Hotel rooms with daily rates of up to Rs. 1,000, maps and charts including atlases would be subject to 12% Goods and Services Tax (GST).

  • A total of 18% GST would be applied on tetra packs and bank charges for issuing checks (bulk or in book form).

  • Printing, writing or drawing ink; knives with cutting blades, letter openers and pencil sharpeners; LED bulb; and drawing and marking devices will be taxed at 18% from today, up from 12% currently.

  • Solar water heaters will now be subject to a GST of 12%, compared to 5% previously.

  • Works contracts for roads, bridges, trains, subways, effluent treatment facilities and crematoriums would also face a tax increase of 18% from the current 12%.

  • Renting a residential house to a commercial entity will be taxed at 18%, as will services provided by regulators such as the RBI, IRDA and SEBI.

  • Facilities processing biomedical waste will be subject to a 12% GST.

  • Non-ICU hospital rooms costing more than Rs. 5,000 per day would be subject to 5% GST, with no input tax credit, up to the amount charged for the room.

List of items that will become cheap

  • Taxes on ostomy appliances and cable transportation of goods and passengers will be reduced from 12% to 5% starting July 18.

  • Rental of a truck or freight transport with the cost of fuel included will now be charged at the reduced rate of 12% instead of 18%.

  • The GST exemption on air travel to and from the northeastern states and Bagdogra would be limited to economy class only.

  • Starting July 18, electric cars, with or without a battery pack, will be eligible for the 5% GST rebate.

First Published: July 18, 2022, 11:46 AM IST