The Goods and Services Tax (GST) regime completed five years on June 30 but continues to be a friction point between the Centre and the states, especially those ruled by the Opposition. States have been clamouring for compensation mechanism to be continued for five more years while the Opposition, especially Congress, is still harping on the “birth defects” of the taxation plan. Amidst all this, the GST Council a few days ago increased tax rates on many items and removed exemptions for several mass consumption items to ‘simplify’ the rate structure. Here’s a look at how this ‘rate rationalisation’ will impact our pockets:
Costlier menu
Pre-packed and labelled meat (except frozen), fish, curd, lassi, paneer, honey, dried leguminous vegetables, papad, dried makhana, wheat and other cereals, wheat flour and jaggery puffed rice (muri) will be costlier as they have been moved from 12% tax slab 18% slab
Banking blues
An 18% GST will also be levied on fee charged by banks for the issue of cheques (loose or in book form)
Not so bright
LED lights, fixtures and lamps have become popular as they are considered to consume less energy and now they will be become more expensive as GST has been raised from 12% to 18%
Pricier items
Power-driven pumps; machines used to clean, sort or grade, seed, grain pulses; wet grinders are also among items on which we will now have to pay higher taxes —18%
Higher medical cost
Room rent (excluding ICU) exceeding `5,000 per day per patient charged by a hospital shall be taxed to the extent of amount charged for the room at 5%
Vehicles
Renting of truck, goods carriage where the cost of fuel is included, and electric vehicles whether or not fitted with a battery pack will also be under 5% tax slab now
Exemptions from tax regime
Unpacked, unlabelled and unbranded items
Transport of passengers from air and from Northeastern states and Bagdogra
Intrastate supplies through e-commerce portals. The suppliers will not have to obtain GST registration, if their turnover is lower than
`40L & `20L for goods and services, respectively