Zero GST For Hotel Rooms Below Rs 1000; Maximum Tax For Pepsi, Coke & Caffeinated Drinks!

GST Council has made some important decisions related with GST on various products and services.

The biggest change has come for hotel and tourism industry, as the 28% GST slab, the highest among them all, has completely removed.

But there is some bad news coming in for fans of caffeinated drinks like Pepsi and Coke, as they will now pay highest GST of 28%.

Here are the details..

GST Removed For Hotel Rooms Below Rs 1000

Users of Sub-Rs 1000 hotel rooms will no longer pay any GST, and this is the biggest news coming in.

For the hotel industry, now exists three GST slabs:

Below Rs 1000 hotel rooms: 0 GST

Rs 1001 to Rs 7500 hotel rooms: 12% (reduced from 18%)

Rs 7500+ hotel rooms: 18% (reduced from 28%)

Travel industry observers are terming this as one of the biggest push for encouraging tourism industry in India, as the reduced taxes will convert to cheaper rooms, which in turn will encourage more travellers to venture out.

Removal of GST for hotel rooms below Rs 1000 will have a ripple effect, across the entire tourism industry.

GST on outdoor catering service too has been reduced to 5%, from existing 18% (with input tax credits)

Highest GST + Cess On Caffeinated Drinks

At the same time, keeping in view the health aspects, Govt. has decided to levy highest GST of 28% on all caffeinated drinks sold in India.

And also an additional cess of 12% has also been imposed.

This will severely impact the bottom-line of Pepsi and Coke, two leading makers of caffeinated drinks, and in the coming days, we may expect a surge in price of these drinks.

Cess On Automobiles Reduced

In a minor relief to the auto sector, which has been facing quite a bit of turnmoil, Govt. and GST Council has reduced cess on petrol vehicle which can carry 10-13 persons has been reduced to just 1%, meanwhile for diesel vehicles with the same capacity, the cess has been reduced to 3%.

This cess is being charged over the 28% GST applicable for such vehicles.

This can result in a minor reduction in price for the vehicle, if the car makers decide to pass the cess benefits, back to the user.

Some other changes on GST:

• Uniform GST of 12% on woven/non-woven polyethylene bags
• GST on almond milk reduced to 18%
• GST on Slide fasteners (zips) reduced to 12%, down from 18%
• GST on diamond job workers reduced to 1.5% from 5%
• GST on marine fule reduced to 5%
• GST on Railway wagons, coaches, roling stock increased to 12% from 5%

After the big-bang economic stimulus of slashing corporate tax, this is another big tax-related cuts, which can boost India’s economy.

We will keep you updated, as more details come in. 

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