Consumers will have to shell out more for household items, bank services, hospitals and hotels from tomorrow with the Goods and Services Tax (GST) Council’s decision scheduled to come into force. Prices for a number of necessities, including pre-packaged, branded food items and hospital rooms, will rise starting on Monday, July 18.
The decision was made last month at the 47th GST meeting, which was presided over by Finance Minister Nirmala Sitharaman and attended by her state counterparts. At the meeting, they reduced the list of exempt goods and services and increased taxes on a variety of other goods and services. Based on an interim rate rationalisation report from the Group of Ministers (GoM), the Council also eliminated duty inversion for commodities where input taxes were higher than output taxes.
The following things will cost extra starting on Monday:
- Pre-packaged, clearly labelled foods like atta, paneer, and curd as well as hospital rooms with rent above Rs 5,000 will be subject to a 5% GST charge from consumers.
2. Additionally, there will be a 12.5% Goods and Services Tax on hotel rooms costing up to Rs 1,000 per day and maps, charts, and atlases (GST).
3. Tetra packs and bank costs for issuing checks will both be subject to a total GST of 18%. (loose or in book form).
4. To remedy the inverted duty anomaly, tax rates on items including printing, writing, or drawing ink, knives with cutting blades, paper knives, and pencil sharpeners, LED lamps, and drawing and marking out tools would be raised to 18% on Monday from the present rate of 12%.
5. GST will now be applied at a rate of 12% as opposed to 5% previously for solar water heaters.
6. The present tax rate of 12 percent will increase to 18 percent for several services, such as work contracts for roads, bridges, trains, metro, effluent treatment facilities, and crematoriums.
7. Renting a residential property to businesses will also be subject to an 18% tax on services provided by authorities like the RBI, IRDA, and SEBI.
8. In contrast, non-ICU hospital rooms exceeding Rs 5,000/day will be assessed 5% GST, without an input tax credit, up to the amount charged for the room. Bio-medical waste treatment facilities will be subject to a 12 percent GST.
9. Besides, individuals will only be able to claim GST exemption for training or coaching in recreational activities relating to arts or culture or sports.
List of items that are becoming cheaper from Monday:
1. Taxes will be cut on on ostomy appliances and on transport of goods and passengers by ropeways to 5 per cent from July 18, from 12 per cent.
2. Renting a truck or goods carriage that includes fuel costs will now be charged at a lower rate of 12% as opposed to 18%.
3. Only economy class flights to and from Bagdogra and the northeastern states will be exempt from the sales tax (GST).
4. From July 18, electric vehicles, whether or not equipped with a battery pack, would be eligible for the reduced GST rate of 5%.
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