Tax rates on certain goods and services will rise from July 18, including some new products brought into the tax grid under the Goods and Services Tax (GST), according to the Treasury Department following the GST council meeting.
The GST council has accepted the recommendations of a panel of finance ministers and the Fitment Committee to bring unbranded but packaged (local) dairy and agricultural products within the scope of a 5 percent tax rate.
Finance Minister Nirmala Sitharaman said in a media briefing after the two-day meeting of the GST council that the final date for implementing the tariff rationalization and exemptions will be July 18.
‘Prepackaged, labelled’ and agri-food products – such as paneer, lassi, buttermilk, packaged curd, wheat flour, other grains, honey, papad, food grains, meat and fish (except frozen), crisped rice, jaggery – are all about to get more expensive be from July 18. Currently, 5 percent GST is levied on branded and packaged foods, while unpackaged and unlabeled goods are tax-exempt.
The Council has also accepted the recommendation of the finance ministers of the state to bring hotel rooms (with a rate of less than Rs 1,000 per night) within the range of 12 per cent GST rate.
In addition, hospital rooms – except ICU – with a daily rent of Rs 5,000 would be taxed at 5 percent without input tax (ITC). This will also take effect from July 18.
Furthermore, the GST on certain kitchenware will increase to 18 percent from the current 12 percent.
GST was first introduced on July 1, 2017, and states were guaranteed compensation for the loss of revenue due to the rollout until June 2022.
But no decision has yet been made at the GST council on state compensation.