All GST rates will be effective from October 1, Finance Minister Nirmala Sitharaman said.
NEW DELHI: After hours of deliberation, the GST Council today announced rate cut on a number of items, amid a chorus of demands for measures to address the slowing economy. All GST rates will be effective from October 1, Finance Minister Nirmala Sitharaman said.
Taxation simplifications and rationalization of tax rules governed the GST council meet today, Sitharaman said.
The panel, comprising state finance ministers and the union finance minister as the chair, was expected to cut tax on 20-25 products.
Almost all quarters of India Inc, including carmakers, consumer biggies such as Britannia and Parle, formed lobby groups to push the government to consider their demands for favourable GST action amid a debilitating liquidity crisis.
Here are the key takeaways from the meeting:
- GST Council approves proposal to hike rates on caffeinated drinks from 18% to 28%, plus an additional 12 % compensation cess. Aerated drinks shall no longer be an under-compensation scheme.
- Council approves proposal to cut rates on hotel tariffs. Rooms with tariff Rs 7,500 and above will now be taxed at 18%. Prior to the cut, the GST rate on this category was 28%. GST on rooms with tariff between Rs 1001 and Rs 7,500 now stands at 12%. No GST on tariffs up to Rs 1,000.
- GST on cups, plates made from flower, leaves and bio-friendly material has been reduced to zero from 5%.
- GST on goods under Chapter 12 which includes supplies to railways has been hiked to 12% from 5%. This is without refund on the accumulated input tax credit (ITC).
- Compensation cess on petrol motor vehicles with 10-13 person capacity reduced to 1%, while on diesel vehicles it has been reduced to 3%. Before the cut, the compensation cess was at 15 percent.
- GST on marine fuel cut to 5% vs 18% earlier.
- Uniform rate of 12% on woven / non-woven polyethylene bags.
- Exemption from GST/iGST is being given on import of specified defence goods not being manufactured indigenously, it’s being extended only up to 2024. Supply of goods and services to FIFA & other specified persons also exempted for Under-17 Women’s World Cup in India.