GST Exemptions Can Be Removed For These Services; GST On Electronics Can Be Hiked To 18% (GST Recommendations By GoM)
In a bid to raise the revenue-neutral rate or RNR to over 11%, a slew of changes in GST has been proposed by a group of ministers.
All of these proposals will be taken into consideration and looked into by the GST Council, comprising the Union finance minister and all state finance ministers, scheduled to meet in Chandigarh on June 28-29.
Amid a list of proposals tabled by the GoM (group of ministers) reviewing the GST rates include removal of exemptions from multiple services like staying in comparatively cheaper hospital rooms, hotel rooms exceeding the tariff threshold and services provided by the financial sector and food safety regulators.
Different GST Proposals by GoMs
- A group of ministers (GoMs) have proposed removing exemptions from multiple services like staying in a relatively cheaper hotel and hospital rooms.
- A GoM headed by Karnataka CM Basavaraj Bommai has proposed a sharp hike in GST rate on electronics waste from 5% to 18%.
- The rate hike is proposed for GST related to petroleum and coal-bed methane exploration work.
- Removing exemptions for reinsurance of exempted insurance schemes like weather-based crop insurance schemes and GST Network services to the Centre.
Sources said the GoM suggested levying GST at the rate of 12% on hotel accommodation below Rs 1,000, a move that would bring a large segment of the hotel industry under the GST purview.
Currently, no GST is levied on hotel rooms with a tariff below Rs 1,000, while the tax is 12% on rooms with tariffs between 1,001 and7,500, and 18% on more expensive rooms, stated a Financial Express report.
“While the progressive removal of exemptions under GST has been one of the stated objectives, it is essential to implement such removal of exemptions in a phased manner without having any adverse consequences on the impacted businesses, which are recovering from two years of business uncertainty and supply chain challenges,” said MS Mani of Deloitte India.