Major Shuffle In GST Rates : Packaged Food, Hotel Rooms Will Be Expensive! Check Full List..

The GST Council, in its 47th meeting in Chandigarh on Tuesday, introduced changes in tax rates of some daily consumer goods which can impact the common man. 

Dearer

Over two dozen goods and services, ranging from unbranded food items, curd and butter milk to low-cost hotels, cheques and maps will now be dearer due to tax hikes.

Cheaper

Tax rates will be lowered for about half a dozen goods and services, including ropeways and truck rentals where fuel costs are included, and scrapped for products imported by private vendors for use by defence forces.

The decisions by the council will come into effect from July 18 onwards.

Upward changes

GST levies have been tweaked for 17 goods and services, including LED lights, solar water heaters and writing inks.

The revisions have been made in order to correct anomalies that had crept in where tax rates on inputs were higher than the final product.

Medical goods

Rates on medical items such as splints for treating fractures, intraocular lens for those with failing eyesight and ostomy appliances will be reduced from 12% to 5%. 

Hospital room rents over Rs 5,000 a day, excluding patients in intensive care units, shall now be taxed at 5%.

No more exemptions

Exemptions covering printing, writing/drawing ink, LEDs, fixtures, lamps, solar water heaters, finished and composition leather, work contracts supplied to the government, and tailoring and other job works for textiles have been lifted. 

As a result, they will all cost more. 

Tetra packing will invite 18% levy against 12% currently

Tax on specified goods for petroleum will be now up to 12 per cent from 5 per cent on input goods to correct inversion.

Benefits to small businesses

Small businesses get relief due to relaxed compulsory registration norms for enterprises which use any e-commerce platforms to sell products.

The move may benefit 1.2 lakhs small taxpayers from waiver of requirement of mandatory registration.

The steps have been taken to ensure a level-playing field for these enterprises to conduct business online and offline after the rule kicks in from 1 January 2023.

Food items

Tax on agricultural items like packaged cereals, wheat, maize, rice, which are unbranded but sold in a labelled package may increase by 5%, said Vivek Jalan, Partner, Tax Connect Advisory, a tax consultancy firm.

“Edible oils as well as milk products are likely to become costlier as a result of the GST rate increases,” he said.