Chandigarh: Prepackaged and labeled wheat flour, papad, paneer, curd and buttermilk to be taxed at 5% after GST Board decides to stop allowing exemptions on these items while increasing rates over a host of others.
The GST Board, in a two-day meeting here, accepted recommendations for rate rationalization made by different groups appointed by it, resulting in tax changes, the Union Finance Minister told reporters, Nirmala Sitharaman. The tax rate changes will take effect from July 18.
However, the council decided to refer the GoM (Group of Ministers) report on casinos, online gaming and horse racing to the panel of ministers for further deliberation.
The Goa finance minister wanted further discussions on the rate of GST to be applied to casinos and in this context online gambling and horse racing would also be reviewed. The panel had recommended a 28% tax on the three activities and equated them with gambling.
The report should be ready by July 15 and will be taken up by the board at its next meeting in August.
GST rates adjust to hit the common man
Ending the exemption would mean that pre-packaged and labeled meat (except frozen), fish, paneer, lassi, honey, dried leguminous vegetables, dried makhana, wheat and other grains, and rice soufflé (muri) will now be subject to a 5% tax. .
Similarly, 18% GST will be levied on Tetra packs and fees charged by banks for issuing checks (in bulk or in book form). Maps and maps, including atlases, will be subject to a 12% tax. Unpackaged, unlabeled and unbranded goods will continue to be exempt from GST.
In addition, a 12% tax will be levied on hotel rooms costing less than Rs 1,000 per day. Currently, this falls under the exempt category.
A 5% GST will be levied on rent for hospital rooms above Rs 5,000 per day (excluding ICU).
Tax rates have been raised to 18 per cent on products such as printing, writing or drawing ink; knives with cutting blades, letter openers and pencil sharpeners; LED lamps, drawing and tracing instruments.
Solar water heaters will now be subject to a GST of 12%, down from 5% previously.
Certain services such as works contracts for roads, bridges, railways, the metro, effluent treatment plants and crematoriums will also see the tax rise to 18% from 12% currently.
However, the tax was reduced to 5% on the transport of goods and passengers by cable car and on ostomy appliances to 5% instead of 12%.
Truck rental, freight transport where the cost of fuel is included will now attract a lower rate of 12 percent from 18 percent.
GST exemption on air passenger transport to and from the North Eastern States and Bagdogra is now limited to economy class.
Services rendered by regulators such as RBI, IRDA and SEBI will be taxed, as will the rental of residential accommodation to commercial entities.
In addition, electric vehicles, whether equipped with a battery pack or not, are eligible for the preferential GST rate of 5%.
The GST board also decided to ease the process for intrastate supplies made through e-commerce portals. Now, these vendors will not have to obtain GST registration if their turnover is less than Rs 40 lakh and Rs 20 lakh for goods and services, respectively. This would come into effect on January 1, 2023.
The council also resolved to form a group of ministers to address the various concerns raised by the states with respect to the constitution of the GST Appeal Tribunal and to make recommendations for appropriate amendments to the CGST Act.
The GoM on IT Reforms, among others, recommended that GSTN put in place the AI/ML (Artificial Intelligence/Machine Learning) based mechanism for background checks of applicants for registration and better monitoring based on the risks of their behavior after registration. so that non-compliant taxpayers can be identified early on and appropriate action taken to minimize the risk to the public purse.