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The 47th GST Council’s meeting was held on 28th and 29th June 2022 under the chairmanship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman marked several recommendations relating to changes in GST rates on the supply of goods and services and changes related to GST law and procedure.

During the two-day meeting, the panel headed by Nirmala Sitharaman and comprising representatives of all states and UTs accepted the recommendation for reviewing the exemption from GST that packed and labeled food items were currently getting. The decision was taken that pre-packed and labeled meat (except frozen), fish, curd, paneer, honey, dried leguminous vegetables, dried makhana, wheat and other cereals, wheat or meslin flour, jaggery, puffed rice, all goods, and organic manure and coir pith compost will not be exempted from GST anymore and shall start attracting 5% GST tax rate.

The imposition of 5% GST on items of common consumption that were so far exempted is said to be regressive. Tax on packed grains below 75 kg will result in an increase in the prices of grains sold in retail. This shall come into effect from Monday, July 18. Let’s learn more about it.

List of household items that will get dearer

➔ Curd, Lassi, Buttermilk (5 percent GST)
➔ Paneer (5 percent GST)
➔ Jaggery of all types including Cane Jaggery (gur), Palmyra Jaggery (5 percent GST)
➔ Khandsari Sugar (5 per cent GST)
➔ Natural Honey (5 percent GST)
➔ Puffed rice (Muri), flattened or beaten rice, (Chira), parched rice (Khoi), rice coated with sugar (Murki) (5 percent GST)
➔ Rice, Wheat, Rye, Barley, and Oats (5 percent GST)
➔ Rice Flour (5 percent GST)
➔ Wheat & Meslin Flour (5 percent GST)
➔ Tender coconut water (12 percent GST)

Any agri and dairy products, if sold loose or packed in front of the customers, will continue to be exempt from GST. The above household essentials will become expensive from July 18, thus creating discomfort for middle-class people in the coming time. Further, items like LED lamps, ink, knives, blades, pencil sharpener, spoons, forks, etc. will also attract more GST.

 

What else gets expensive?

Description of goods or services earlier exempted/partially exempted.

Old Rate

New Rate

Earlier fully exempted, now withdrawn

Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed

Nil

12%

Cheques, lose or in book form

Nil

18%

Parts of goods of heading 8801

Nil

18%

Air transportation of passengers to and from north-eastern states and Bagdogra now restricted to economy class

Nil

Condition added

Transportation by rail or a vessel of railway equipment and material, storage or warehousing of commodities attracting tax such as copra, nuts, spices, jaggery, cotton, etc, fumigation in a warehouse of agri produce, services by RBI, IRDA, SEBI, FSSAI, and GSTN, renting of residential dwelling to GST-registered businesses, and services by the cord blood banks for preserving stem cells

Nil

Applicable rate

GST surcharge on room rent (excluding ICU) for hospitalized patients when those costs exceed Rs 5,000 per day.

 

 

 

Nil

5%

Common bio-medical waste treatment facilities for treating or disposing biomedical waste shall be taxed with availability of ITC, like CETPs

Nil

12%

Hotel lodging costing less than Rs 1,000 per day.

Nil

12%

Training or coaching in recreational activities on arts or culture, or sports other than by individuals

Nil

Applicable rate

Earlier partially exempted.

Petroleum/ Coal bed methane

5%

12%

e-Waste

5%

18%

Scientific and technical instruments to public funded research institutes

5%

Applicable rate

 

Other Goods/Services attracting more GST

Description of goods or services

Old Rate

New Rate

Solar water heaters and systems

5%

12%

Prepared/ finished/chamois/ composition leathers

5%

12%

Job work in relation to –

Processing of hides, skins, leather/Making of leather products including footwear/Manufacturing of clay brick

5%

12%

Earthwork works contracts and subcontracts to the Central and state governments, Union Territories and local authorities

5%

12%

Pawan Chakki being air-based atta chakki, wet grinder, cleaning, sorting or grading machines for seeds and grain pulses, and milling machines or cereal making machines, etc;

5%

18%

Drawing, printing, and writing Ink

12%

18%

Knives with cutting blades, Paper knives, Pencil sharpeners and blades therefor, Spoons, forks, ladles, skimmers, cake-servers etc

12%

18%

Power driven pumps primarily designed for handling water such as centrifugal pumps, deep tube-well turbine pumps, submersible pumps; Bicycle pumps

12%

18%

Milking machines and dairy machinery, cleaning, sorting or grading machines and its parts for eggs, fruit or other agri produce

12%

18%

LED Lamps, lights and fixture, their metal printed circuits board;

12%

18%

Marking out and drawing instruments

12%

18%

Services by foreman to chit fund

12%

18%

Works contract for railways, metro, roads, bridges, effluent treatment plant, crematorium, etc.

12%

18%

Works contract supplied to central and state governments, local authorities for historical monuments, canals, dams, pipelines, plants for water supply, educational institutions, hospitals etc. & sub-contractor thereof

12%

18%

Cut and Polished diamonds

0.25%

1.50%

Tetra Pack (Aseptic Packaging Paper)

12%

18%

Tar (From coal, or coal gasification plants, or producer gas plants and coke oven plants)

5%/18%

18%

 

What gets cheaper?

Import of tablets called Diethylcarbamazine (DEC) free of cost for National Filariasis Elimination Programme (IGST)

5%

Nil

Import of particular defense items by private businesses or suppliers for end-consumption of Defense (IGST)

Applicable rates

Nil

Ostomy Appliances

12%

5%

Orthopedic appliances such as intraocular lens, artificial parts of the body, splints and other fracture appliances, other appliances which are worn or carried, or body implants, to compensate for a defect or disability

12%

5%

Transport of goods and passengers by ropeways (with ITC of services)

18%

5%

Renting of truck or goods carriage including the fuel cost

18%

12%

 

Read More: UAN Importance, Benefits, and Activation Process
 
Conclusion

A range of items will now come under the purview of the Goods and Service Tax with the withdrawal of exemptions.GST was considered to be India's most comprehensive indirect tax reform in decades, however, it is now creating an extra burden on the middle classes by removing the exempted status from basic household essentials. The Council needs to think about increasing revenue by increasing tax on luxuries and not on necessities.

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