From July 18, the tax hike will be applicable for over two dozen goods and services, ranging from non-branded food items, curd and buttermilk to low-cost hotels, checks and maps, the Goods and Services Tax (GST) Council said. Decided after a marathon. The two-day meeting concluded on Wednesday.
At the same time, tax rates will be lowered for about half a dozen goods and services, including ropeway and truck fares where fuel costs are included, and scrap for products imported by private vendors for use by defense forces. .
In the meeting, over a dozen states wanted the GST compensation to continue for some more time.
The upward change in GST levy includes changes for 17 goods and services, including LED lights, solar water heaters and writing ink, to correct anomalies that arose from inverted duty structures, where The tax rates on inputs were higher than on the final product. Separately, the tax rate on Tetra Pak has been increased from 12% to 18%, while cut and polished diamonds will now attract 1.5% GST instead of the existing 0.25%.
The GST rate on splints to treat fractures, intraocular lenses for people with loss of vision and ostomy devices will be reduced from 12% to 5%. The Council has also clarified that Assisted Reproductive Technology and In Vitro Fertilization (IVF) services come under health care services for the purpose of GST exemption, but stem cell protection services will no longer be tax free. Hospital room rent exceeding ₹5,000 per day, except for patients in intensive care units, will now be taxed at 5%.
The exemptions and concessional rates on several items will be withdrawn based on the recommendations of a Group of Ministers (GoM) headed by Karnataka Chief Minister Basavaraj Bommai, which was accepted in ‘TOTO’ by the Council, its Chairman and Union Finance Minister. Minister Nirmala Sitharaman said.
high inflation
Responding to concerns that a change in the GST rate could feed into the prevailing high inflation, Ms Sitharaman said inflation was everyone’s concern and the council’s decisions were not taken separately. “The elected representatives who are part of the council are inflation conscious,” she said.
Conducting the council’s first ‘regular’ meeting since September 2021, Ms Sitharaman said the meeting also considered the reports of three other ministerial groups, of which two were ratified.
While Mr Bommai’s panel’s suggestions on exemptions and tax changes for certain items were accepted, the GoM has been given three more months to recommend a major overhaul of GST rates, with potential across multiple tax slabs. would involve increasing the reduction and higher tax rates. Revenue collection from the indirect tax regime completing five years this week.
While the GoM report formed the main agenda of the two-day meeting, the Finance Minister said that an ‘additional agenda item’ also emerged – the concern of the states about the sunset of revenue assured through GST compensation from July 1, which was heard Gone fast through Wednesday’s deliberations.
“Some states said they want GST compensation to continue today, and more states spoke later, suggesting that the extension could be for a few years, if not five years. We heard them, Ms Sitharaman said.
Revenue Secretary Tarun Bajaj said that about 16-17 state representatives in the council spoke on the issues of GST compensation, out of which around 12-13 sought extension of the assured compensation period, while three-four distanced themselves from it. talked about the need. Dependence on assured revenue.
IT system changes
Based on the recommendations of a GoM headed by Maharashtra Deputy Chief Minister Ajit Pawar, the amendments in the IT system of GST have been approved to comply with the amendments and crack down on tax evasion. These include a new risk-based registration system that will be implemented over the next three to six months to curb the menace of fake invoicing by firms, which appear and disappear soon, Mr. Bajaj said. Told.
The council also accepted the suggestions of another GoM led by Kerala Finance Minister KN Balagopal on movement of gold and precious stones, asking states to implement the e-way bill system for inter-state movement of gold prices. Helped decide the best course of action. Above ₹ 2 lakh.
In order to resolve the long pending issue of constitution of GST Appellate Tribunal, the Council has decided to constitute a new Group of Ministers, whose report will be taken up in its next meeting, which will be held by the Finance Minister during the first week of August. did. Madurai.
The taxation regime for online gaming, horse racing and casinos, the review of which was submitted to a GoM headed by Meghalaya Chief Minister Conrad Sangma, will also be taken up during the August meeting, as the Goa Finance Minister informed about the current recommendations of the GoM. I had raised many concerns. Casino related.
“We have decided that the GoM should re-hear stakeholders from all these sectors including horse racing and online gaming and submit a report by July 15,” Ms Sitharaman said.