NEW DELHI: The GST Council has finally bitten the bullet by increasing tax rates on several items amid inflationary pressure and supply disruptions due to geopolitical tensions. Acting on the interim report of the Group of Ministers (GoM) on rate rationalisation, the Council in its meeting in Chandigarh has increased rates on several goods and services. Though most of the increases in GST have been made owing to the removal of the inverted duty structure, the Council also decided to do away with exemptions on several goods and services. The changes will be implemented from July 18.
The GoM, headed by Karnataka Chief Minister Basavaraj Bommai, has been given 3 months time to submit a final report on rate rationalisation and tax slab merger. Finance Minister Nirmala Sitharaman in a statement on GST Councils decisions said none of the states opposed to increase in tax rates. When asked about the inflationary impact due to current tax rate hikes, the minister said inflation is not a particular state’s concern. With the removal of exemption on certain items, pre-packed and labelled meat, except frozen, fish, curd, paneer, honey, dried leguminous vegetables, dried makhana, wheat and other cereals, wheat or meslin flour, jaggery, puffed rice (muri), all goods and organic manure and coir pith compost will now attract a 5% tax from July 18.
Besides this, 18% GST has been imposed on fees charged by banks for the issue of cheques, either lose or in book form. Maps and charts, including atlases, will attract a 12% tax and the goods, which are unpacked, unlabelled and unbranded will continue to remain in the exemption list under GST. Also, a tax of 12% on hotel rooms below `1,000 per day will be levied, which currently falls under the exempted category.
Council also cleared correction in inverted duty structure for some items, including edible oil, coal, LED lamps, printing/drawing ink, finished leather and solar water heater. It also approved the fitment committee report on tweaking tax rates in some items. Tax rates for orthopaedic implants (trauma, spine, and arthroplasty implants in body); orthoses (splints, braces, belts & callipers); prostheses (artificial limbs) will be decreased to a uniform 5%, from the current differential rate of 12% and 5%.
Meanwhile, the committee also recommended cutting GST on ropeway travel from 18% to 5% and on Ostomy Appliances to 5% from 12%. The GST on tetra packs will also be increased to 18% from the current rate of 12%. Further, the GST Council has decided to make the e-way bill mandatory for the intra-State movement of gold.
GST rate rationalisation
Acting on the interim report of GoM on rate rationalisation, the GST Council in its meeting in Chandigarh has increased the rates on several goods and services:
