New GST Rates – Which items will be costlier?

GST rates on many goods and services will be revised effective July 18. This decision was taken as part of rate rationalisation during the meeting of members of the 47th GST council. As part of the decision taken by the GST Council, GST will now be levied on many items that previously remained out of scope. This move has been long anticipated as the economy slowly shifts toward higher GST for higher revenues during rising inflation. 

GST impacts both businesses and individual consumers. Here are the details of the changes being introduced that consumers must now be prepared to pay for.

Which items will be costlier

GST on packaged food

5% GST will be applicable to the below-mentioned packaged food (pre-packed and labelled) items that were earlier exempt from GST:

• fish,
• meat (except frozen), 
• curd, 
• paneer, 
• lassi, 
• dried leguminous vegetables, 
• wheat and other cereals, 
• wheat flour, 
• dried makhana, 
• jaggery, 
• honey, 
• puffed rice, 
• organic manure,
• coir pit compost 

Unpacked, unlabelled and unbranded goods will still be exempt from GST. 

GST on bank chequebooks

GST at 18% will now be applicable to fees charged by banks towards fresh cheque-book issuance. This will be applicable for both loose and book form chequebooks. 

GST on hotel room charges

Hotel room rates under Rs. 1,000 per day will now attract 12% GST as opposed to being tax-exempt earlier.

GST on hospital beds

Hospital room rentals (except ICU) that are above Rs. 5,000 per day (per patient) will attract 5% GST.

GST on LED lights and lamps

With a revised inverted duty structure proposed between 12-18%, the prices of LED Lights, LED Lamps and fixtures will rise.

GST on pumps and machines

GST has been revised from 12 to 18% on the below-mentioned:

• bicycle pumps 
• deep tube-well turbine pumps, 
• centrifugal pumps, 
• submersible pumps, 
• machines used in cleaning, sorting and grading seeds or pulses, 
• machines used in milling industry,
• pawan chakki,
• atta chakki, 
• wet grinder 

GST on knives

18% GST will be applied instead of the earlier 12% on the following items:

• knives with cutting blades, 
• paper knives, 
• pencil sharpeners 
• blades 
• spoons, 
• skimmers, 
• forks, 
• ladles, 
• cake-servers 

Which items will get cheaper

GST on orthopaedic appliances

The following will attract 5% GST instead of 12% earlier:

• splints,
• fracture appliances,
• artificial body parts,
• appliances worn or implanted or carried in a body to cover for a defect or disability, 
• intraocular lens 

GST on defence items

No IGST will be applied to certain defence items that are imported by private companies/vendors if the end-user of the item is the country’s Defence forces.

GST on ropeway rides 

Ropeway transport of goods and passengers has been reduced from 18% to 5%.

GST on goods carriage rentals

GST on rentals for goods carriage (where fuel cost is included in the total amount) has been reduced from 18% to 12%.

GST on air travel

GST exemption will be applied for air travel of passengers to and from northeastern states and Bagdogra. 

Conclusion

With the introduction of GST (Goods and Services Tax), the Indian tax system has gone through a lot of changes, especially bringing in uniformity and higher transparency. It has helped eliminate the multiple-tax effect of the previous regime since it is collected at every stage of the supply chain. GST system is designed in a way that essential goods and services fall under the lower tax brackets, whereas luxury items or services attract higher tax. 

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