New GST rates apply from today: What's costlier, what's cheaper
The new Goods and Services Tax (GST) rates go into effect on Monday. The rates were decided at the GST Council's 47th meeting presided over by the Union Finance Minister Nirmala Sitharaman last month. The new levies have been applied to a variety of goods and services. While the GST on certain items will be raised, others will be reduced. Here are the details.
According to the GST Council's order, unbranded but pre-packaged curd, lassi, buttermilk, food products, cereals, and other items formerly excluded from GST have been brought into the GST net. From today, an 18% GST will be applied on bank cheque books/loose leaf checks and a 12% GST on maps, atlases, and globes. Ink for writing, printing, or drawing will also become more costly.
The GST rate for medical equipment such as ostomy and orthopedic appliances is now 5%. Earlier it was 12%. Similarly, the GST for transporting products and persons by ropeway has been reduced from 18% to 5%, and the GST for renting a truck or goods carriage that includes the cost of fuel has been reduced from 18% to 12%.
As per officials, printing, writing ink, knives with cutting blades, paper knives, and pencil sharpeners are among the other commodities for which GST rates are now 18% rather than 12%. They said spoons, forks, ladles, skimmers, and cake servers also have the same rate. Similarly, the GST is now 18% on power-driven pumps such as centrifugal pumps, deep tube-well turbine pumps, and bicycle pumps.
The GST rate for machinery for cleaning and grading seed, grains, milling, or processing cereals, for example, has risen from 5% to 18%. Similarly, the GST rate on solar water heaters and systems, as well as some leather items, has been raised to 12%. The GST on LED lighting and fixtures, metal printed circuit boards, and drawing and marking devices stands at 18%.
The new rates are high in the service sector, per the GST council order. The GST rates vary on the processing of hides, skins, leather, leather goods, footwear, clay brick manufacturing, and work contracts for roads, bridges, trains, metro, effluent treatment plants, crematoriums, and other similar projects. Concessional charges have also been raised for electronic trash, petroleum, and coal bed methane.
Hotel rooms up to Rs. 1,000 per day would be taxed at 12%, whereas hospital rooms (excluding ICU) exceeding Rs. 5,000 per day per patient will be taxed at 5%, with no input tax credit. The tax exemption for training or coaching in leisure activities related to the arts, culture, or sports shall be limited to services provided by a single person.
The tax exemption for rail transportation, equipment, commodity storage or warehousing, and agricultural produce fumigation in a warehouse has been removed. Similarly, services provided by the RBI, IRDA, SEBI, FSSAI, and GSTN have been placed under the ambit of GST. In addition, renting out a residential residence and services offered by cord blood banks are now subject to GST.