GST council meet highlights: Here's what got cheaper and dearer

The all-powerful GST (goods and services tax) Council on Friday made some major changes in the tax rate of goods and services with a view to addressing sectoral concerns in a slowing economy. These tax changes have come on a day when the government announced big reductions in corporate tax rates to boost private investments and pull the economy out of a six-year low growth and a 45-year high unemployment rate.

The 37th meeting of the GST Council was headed by Finance Minister Nirmala Sitharaman along with the representatives of all states. While the council did not take a decision on cutting tax on automobiles as well as items like biscuits, it made some changes in the tax rates of hotel tariffs and caffeinated beverages. In all, the GST Council revised rates on 20 goods and 12 services. The minister said the rate changes shall be made effective from October 1.

READ | GST Council: Tax on caffeinated drinks hiked, hotel tariffs reduced

Here are the goods that got cheaper:

• Hotel room tariffs: In order to boost the hospitality industry and tourism, the GST on hotel rooms with tariffs of up to Rs 1,000 per night will be nil. Furthermore, hotel room tariffs between Rs 1,001 and Rs 7,500 per night has been cut to 12 percent from the existing 18 percent. Also, the tax on room tariff of above Rs 7,500 has been slashed to 18 percent from the existing 28 percent.

• Passenger vehicles: Lower 12% cess on 1,500 cc diesel, 1,200 cc petrol vehicles with the capacity to carry up to 13.
• Cut in the GST rate on slide fasteners (zips) to 12 percent from 18 percent
• Cut in marine fuel to 5 percent from 18 percent
• Cut in wet grinders to 5 percent from 12 percent and
• Cut in dried tamarind from 5 percent to nil
• Reductions in GST of plates and cups made up of leaves/flowers/bark from the current 5 percent
• GST has been cut to 0.25 percent on cut and polished semi-precious stones from present 3 percent
• Tax on diamond job work has been reduced to 1.5 percent from 5 percent earlier
• A uniform GST rate of 12 percent on polypropylene/polyethylene woven and non-woven bags and sacks used for the packing of goods will be levied in place of present rates of 5 per cent/12 per cent/18 per cent, respectively

READ | Nirmala Sitharaman: MSMEs to get pending GST refunds within 30 days

Here's what got expensive:

• GST has been more than doubled on caffeinated beverages to 40 percent. Nirmala Sitharaman said the GST on caffeinated beverages has been hiked to 28 percent plus an additional cess of 12 percent as against the current rate of 18 percent. Also, aerated drink manufacturers have been excluded from the composition scheme and restrictions placed on refund of compensation cess on tobacco products.
• GST on railway wagons, coaches, rolling stock has been increased from 5 percent to 12 percent.

READ | Automobiles GST reduction in hands of Finance Minister: Nitin Gadkari

Exemptions:

Nirmala Sitharaman announced that import of specified defence goods not being manufactured indigenously, the supply of goods and services to FIFA for organising under-17 Women's Football World Cup in India, and supply of goods and services to Food and Agriculture Organisation (FAO) for specified projects in India has been exempt from GST. The Council also exempted fishmeal as well as pulley, wheels and other parts for agricultural machinery from GST for specified periods. 5 percent GST would be applicable on specified goods used for oil and gas exploration and production under the licensing policy.

READ | Corporate tax slashed down to 25.17 pc for domestic companies

(with PTI inputs)