In the recently held 47th GST meeting chaired by Finance Minister Nirmala Sitharaman, the GST Council had unanimously decided to hike GST rates on a range of essential items and services. The Central Board of Indirect Taxes & Customs (CBIC) has implemented the decision taken in the GST Council Meeting with effect from July 18, 2022 and resultantly, the common man will have to shell out more for household items, bank services, hospitals and hotels amongst others.
Here is the full list of goods and services which are going to become costlier from July 18, 2022:
Contents
A. GST rate changes on Goods
1. For the Common man
- Exemption for following pre-packaged and labelled products (as per Legal Metrology Act, 2009) has now been withdrawn irrespective of whether bearing a brand name or not and GST is to levied at 5%/12%:
|
Taxable @5% |
Taxable @12% | ||
| Curd; Lassi; Butter milk | Chena or paneer | Natural honey | Tender coconut water |
| Dried makhana | Rice | Wheat and meslin | Manioc, arrowroot, salep, Jerusalem artichokes, sweet potatoes and similar roots and tubers with high starch or inulin content, frozen, whether or not sliced or in the form of pellets |
| Rye | Barley | Oats | |
| Maize Corn | Grain sorghum | Wheat or meslin flour | |
| Buckwheat, millet and canary seed; other than cereals such as Jawar, Bajra, Ragi | Cereal flours other than of wheat or meslin i.e. maize (corn) flour, Rye flour, etc. | Cereal groats, meal and pellets, including suji and dalia | |
| Dried leguminous vegetables, shelled | Meat and edible meat offal | Fish and crustaceans, molluscs and other aquatic invertebrates | |
| Meal, powder, Flour flakes, granules and pellets of potatoes | Animal or vegetable fertilisers or organic fertilisers | Jaggery of all types; Khandsari Sugar | |
| Guts, Bladders And Stomachs Of Animals(Other Than Fish), Whole And Pieces Thereof, Fresh, Chilled, Frozen, Salted, In Brine, Dried Or Smoked | Meal and powder of the dried leguminous vegetables of heading 0713 (pulses) other than guar meal and guar gum refined split, of sago or of roots or tubers or of the products of Chapter 8 | Puffed rice (Muri), flattened or beaten rice (Chira), parched rice(Khoi), parched paddy or rice coated with sugar or gur (Murki) | |
| Manioc, arrowroot, salep, Jerusalem artichokes, sweet potatoes and similar roots and tubers with high starch or inulin content, frozen, whether or not sliced or in the form of pellets | |||
- Mangoes (other than mangoes sliced, dried), earlier exempted, now taxable at 12%
- Blades, paper-cutting scissors, pencil sharpeners, spoons, forks, ladles, skimmers, and cake-servers: GST increased from 12% to 18%
- Cheque books or cheques in loose form issued by banks: earlier exempted, now taxable @18%
- Maps and similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed: earlier exempted, now taxable @12%
- GST on LED lamps and LED lights increased from 12% to 18%
2. Other relevant goods
|
Description of Goods |
Earlier Rate | Present Rate w.e.f. 18th July 2022 |
| Leather including Chamois and Composition leathers | 5% | 12% |
| E-waste | 5% | 18% |
| All Goods, including printing ink, writing or drawing ink and other inks, whether or not concentrated or solid, fountain pen ink, ball pen ink | 12% | 18% |
3. Goods supplied for Petroleum/Coalbed Methane operations
3. Rationalisation of tax on goods supplied for Petroleum/Coalbed Methane operations by increasing concessional tax from 5% to 12%
4. Fly ash bricks
Fly ash bricks to attract same concessional rate irrespective of fly ash content
5. No refund of under Inverted Duty Structure on supply of Edible oils and Coal
No refund of accumulated unutilised ITC on supply of edible oils and Coal, lignite and peat to remove Inverted Duty Structure
B. GST rate changes on Services
1. Goods Transport Agency (GTA)
- GTA has following three options:
- Reverse charge @5% without ITC
- Forward Charge @5% without ITC
- Forward charge @12% with ITC
- The option by GTA to pay GST on forward charge basis during a Financial Year shall be exercised by making a declaration in the prescribed format on or before the 15th March of the preceding Financial Year.
- For FY 2022-2023, the option shall be exercised on or before August 16, 2022, however, invoices for supply under forward charge can be issued till such date.
2. Withdrawal of Exemptions
- Hotel rooms with less than ₹1,000 per day, which was earlier exempted, is now taxable @ 12%
- Rooms provided by clinical establishments (except ICU/CCU/ICCU/NICU) having room charges exceeding ₹ 5000/- per day per patient which was earlier exempted is now taxable @ 5%
- Residential dwelling rented to a registered person, taxable under reverse charge mechanism
- Services provided by a GTA where freight upto Rs. 1500 for single consignment carriage and freight upto Rs. 750 per consignment for multiple consignment carriage.
- Transportation by rail/vessel of railway equipment and material
- Storage or warehousing of nuts, spices, copra, sugarcane, Jaggery, cotton, flax, jute, indigo, unmanufactured tobacco, betel leaves, tendu leaves, coffee and tea
- Treatment or disposal of biomedical waste or the processes incidental thereto by a common bio-medical waste treatment facility to a clinical establishment withdrawn and now it would be taxable @ 12%
- Services provided by department of post irrespective of the status of recipient, , taxable under reverse charge mechanism
- Services provided by the RBI, IRDAI, SEBI, FSSAI, GSTN,
- Services provided by way of fumigation in a warehouse of agricultural produce
- Services by way of training or coaching in recreational activities relating to arts or culture provided by persons other than an individual
3. Change in rate
- Renting of goods carriage where the cost of fuel is included in the consideration charged from the service recipient would be taxable @ 12% instead of 18%
- Transport of passengers, with or without accompanied belongings, and transport of goods by ropeways would be taxable @ 5% instead of 18% provided ITC has not been taken on goods used in supplying the service
- Works contract services would be taxable @18% instead of 12% when supplied to Central and State Governments and Local Authorites for historical monuments, canal, dam, pipelines, plants for water supply, educational institutional, hospitals, etc. and subcontract thereof
- Works contract services for roads, bridges, railways, effluent treatment plant, crematorium, affordable residential apartments, etc. would be taxable @18% instead of 12%
- Works contract would be taxable @12% instead of 5% when supplied to Central and State Governments and Local Authorites involving predominantly earth work (>75%)and sub-contracts thereof.
- Services by way of job work in relation to
- Processing of hides, skins and leather,
- manufacture of leather goods or foot wear falling,
- manufacture of clay bricks,
would be taxable @ 18% instead of 5%
4. Tour Operator Service
- Exemption to be provided on tour operator service, performed partly in India and partly outside India, supplied by a tour operator to a foreign tourist to the extent stated below:
- Exemption = Lower of:
a. Proportion of total consideration equal to number of days of tour performed outside India to the total number of days of tour;or
b. 50% of the total consideration
C. Concluding remarks
While such decisions on changes in GST rates and withdrawal of exemptions are in line with the Finance Minister’s vision for GST rate rationalization to make up for the ‘inefficiencies’ in the value chain and to increase the revenue-neutral rate, however, such decisions come at a time when the common man and the economy is reeling under high inflationary pressures with the retail inflation being over 7% in June — much above the RBI’s threshold of 6%. Keeping the big picture in mind, it makes one ponder if this is really the right time for such an exercise given India’s high inflation and amidst the geopolitical tensions.
You may reach the author at cajaybohra@gmail.com
Disclaimer: Views and Opinions expressed in the article are my personal and do not construe any suggestion or a professional or legal advice. The author does not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this article.
Author Bio
Commercial Department information for private hospital payment details suppliers GST ACT 2017 Section 151