Written bySagar Malik ·
The council has approved tax cuts for various sectors including hospitality, jewelry and defense, she announced.
The tax changes are aimed at boosting the country's abysmal economic condition, and shall be effective from October 1.
Here are the key highlights from the press conference.
The GDP growth rate of the Indian economy has dropped to 5% in the first quarter of fiscal year 2019-20, lowest in six years.
Moreover, India's automobile sector is striving for survival; consumer-demand has fallen, and manufacturing sector is failing.
In what could bring a major boost to the hospitality and tourism sector, hotel room tariffs of Rs. 7,500 or above will now be taxed at 18%, compared to 28% previously.
Further, GST rate on hotel room tariffs between Rs. 1,001 and Rs. 7,500 has been reduced to 12% from 18%.
No GST charge shall be levied on hotel tariffs up to Rs. 1,000.
Meanwhile, consumers of caffeinated beverages are in for a disappointment, as applicable GST rate on such drinks has been hiked from 18% to 28%. An extra 12% compensation cess will also be levied. However, aerated drinks will no longer come under the compensation scheme.
Moving on, GST rate applicable on cut and polished semi-precious stones has been slashed drastically from 3% to 0.25%.
Further, no GST will be levied on jewelry exports from now.
Moreover, tax rate on job work services related to diamonds has dipped from 5% to 1.5%.
Separately, for machine job works in engineering industry, the GST rate has come down from 18% to 12%.
The FM also announced several tax exemptions.
For one, group insurance schemes for paramilitary forces under the Home Affairs Ministry will now be free from GST.
Further, no GST will be levied on specified defense goods that are not manufactured in India, until 2024.
Clearing more air, the Council recommended that fishmeal be exempt from GST from July 17 to September 30 this year.
However, despite repeated requests by stakeholders (including consumer biggies like Britannia and Parle), the GST Council rejected proposals to reduce tax rate on biscuits.
Moreover, no tax relief for automobile industry was considered, despite the sector's appalling condition.
The GST Council has finalized 12% cess on 1,500cc diesel and 1,200cc petrol vehicles with the capacity to carry maximum 13 people.
Earlier yesterday, the government also slashed income tax for corporates.
It was announced that basic corporate tax for for domestic companies and new manufacturing organizations has been brought down to 22% (effective rate 25.17%) and 15% (effective rate 17.01%) respectively.
The move, that will cost the government Rs. 1.45 lakh crore annually, resulted in massive surge in Indian stock markets.
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