Friday, August 19, 2022

New GST rates come into effect

Consumers will have to shell out more starting July 18 as several goods and services will cost higher with the Goods and Services Tax (GST) Council approving rate hike to address inverted duty structures and withdrawing some exemptions.
Items that will cost more:
Single packages of food items like cereals, pulses and flour weighing up to 25 kg will be considered as ‘prepackaged and labelled’, and liable to 5% GST. Other items such as curd, lassi, and puffed rice too would attract GST at the rate of 5% when pre-packaged and labelled.
Printing, writing or drawing ink, knives with cutting blades, paper knives, pencil sharpeners and blades, spoons, forks, ladles, skimmers, and cake-servers. These items would now attract 18% instead of 12%. LED lamps and solar water heaters will attract 18% tax.
Tetra Pak (or aseptic packaging paper) used for packaging liquid beverages or dairy products will now attract 18% GST instead of 12%. Cut and polished diamonds will be taxed at 1.5% compared to 0.25% earlier. Hotel accommodation rates up to Rs 1,000 per day will now be now taxed at 12%. 5% GST on non-ICU hospital rooms with room rent above Rs 5,000 per day.
18 % Goods and Services Tax (GST) will be applicable on bank cheque book/loose leaf cheques and 12 % on maps, atlas, and globes.
The rate on machines for cleaning, sorting or grading seed, and grain pulses, machinery used in milling industry or for the working of cereals etc, ‘pawan chakki’, or air-based atta chakki, wet grinder goes up from 5% to 18%.
Machines for cleaning, sorting or grading eggs, fruit or other agricultural produce and its parts, milking machines and dairy machinery will have rates going up from 12% to 18%.
Exemption on following services is being withdrawn – transportation by rail or a vessel of railway equipment and material, storage or warehousing of commodities which attract tax (nuts, spices, copra, jaggery, cotton etc.), fumigation in a warehouse of agricultural produce, services by the RBI, the IRDA, the SEBI, and the FSSAI, GSTN, renting of residential dwelling to business entities (registered persons), and services provided by the cord blood banks by way of preservation of stem cells.

What gets cheaper: Tax on NSE -0.04 % goods and passengers by ropeways would decline to 5% from 18%.
Renting truck/goods carriage where the fuel cost is included will be cheaper as the tax is reduced to 12% instead of 18%.
GST rates on medical items like ostomy and orthopaedic appliances – splints and other fracture appliances, artificial parts of the body, other appliances which are worn or carried, or implanted in the body, to compensate for a defect or disability, and intraocular lens- have come down to 5% from 12%.
Tax exemption on training or coaching in recreational activities relating to arts or culture, or sports is being restricted to such services when supplied by an individual. Transport by air to and from North Eastern states and Bagdogra for economy class.


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