The GST Council decided on Wednesday to accept the interim reports from the group of ministers on the correction of the tax inversion and exemption. Pre-packaged and pre-labeled retail packaging, including curd, lassi and buttermilk. The GoM for casinos, online gaming and horse racing has also been given time to re-examine the issues and submit its new report until July 15, delaying the proposal to impose a 28 percent tax on these activities. .
However, the government’s administration on rationalizing tax brackets has been given three months to submit its report.
On the GST compensation, Finance Minister Nirmala Sitharaman told reporters on Wednesday that some states want it to continue for some time, if not five years, but at least for some time. She added that some states also said they needed to find ways to offset their resources and not depend on centralized compensation.
Abhishek Jain, partner (indirect taxation) at KPMG in India, said: “The Council did not decide on the extension of the period for which the states should be compensated. While a few states demanded the said extension, a few did not want to trust on discontinuing compensation to meet revenue requirements, as such, industry players will have to wait a while to understand the fate of discontinuing compensation.”
Where GST increased, where decreased
Goods and Services Tax (GST) was exempt on specified foodstuffs and grains, etc., when they were unbranded, or when the right to the mark was waived. The Council has now recommended a review of the scope of the exemption to exclude from it prepackaged and prelabelled retail packaging, including cottage cheese, lassi and buttermilk. The rates for some goods and services have also changed. The rate changes recommended by the 47th GST Council will take effect from July 18.
The Council also decided to impose a GST of 18 percent on the fees charged by banks for issuing checks (individual or in book form); bring hotel rooms under Rs 1,000 per day under the 12 percent GST plate as opposed to the tax-exempt category currently.
Room rent, excluding ICU, which exceeds Rs 5,000 per day per patient, charged by the hospital, will also be taxed at 5 percent, without pre-tax. It has also decided to levy 12 percent GST on all types of maps and hydrographic or similar maps, including atlases, wall maps, topographical maps and globes.
GST exemption for services extended by RBI, Irdai, Sebi, FSSAI and GST has also been revoked. GST on petroleum/carbon bed methane has been increased from 5 percent to 12 percent, that on e-waste has also been increased from 5 percent to 18 percent. The tax on scientific and technical instruments supplied to government-funded research institutions has been increased from 5 percent to the ‘applicable rate’.
The Council lowered the GST from 12 percent to 5 percent on ostomy appliances (including pouch or flange, barrier cream, sleeves, irrigation kit, micropore tapes, ostomy adhesive paste, belt). It also lowered the rate from 12 percent to 5 percent on orthopedic devices (splints and other fracture aids); artificial parts of the body; other devices worn, worn or implanted in the body to compensate for a defect or disability; and intraocular lens.
IGST on imports of Diethylcarbamazine (DEC) tablets supplied free of charge for the National Filariasis Elimination Program, and IGST on specified defense items imported by private entities/suppliers, when the end user is the armed forces, are exempt.
GoM On Rate Rationalization given extra time
The group of the minister for tariff rationalization has been given three months to investigate the matter further.
KPMG’s Jain said that since the current revenue-neutral rate is below the target rate of 15.5 percent, new GST tax plates can be expected. In addition, the Board has proposed to withdraw the exemptions for some deliveries, in addition to rate changes for some deliveries, whether or not to correct inversions. “These changes are expected to provide a slight increase in GST collections.”
GoM On Casino, Online Games Given Extra Time
The GST Council has instructed the group of ministers (GoM) on casinos, online gaming and horse racing, led by GST Council Meghalaya Chief Minister Conrad Sangma, to investigate the matter further and submit its report until July 15 . The Council has postponed the proposal to impose a 28 percent tax on casinos, online gambling, horse racing and lotteries.
Sitharaman said on Wednesday that on the face of it, the Council believed that the common thread connecting them is that these activities have the nature of “gambling” and should be taxed accordingly. She said a GST Council meeting will be held in the first week of August to discuss the new report from the GoM.
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