The GST Council on Wednesday decided to accept the interim report of the Group of Ministers on reversal of duty and reforms in exemptions. Pre-packaged and pre-label retail packs including Dahi, Lassi and Butter Milk. The GoM on casinos, online gaming and horse racing has also been given time to re-examine the issues and submit its fresh report by July 15, thus deferring the proposal to levy 28 per cent tax on these activities.
However, three months’ time has been given to the GoM to submit its report on rate rationalization.
On GST Compensation Cess, 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. He said that some states also said that they should find ways to replenish their resources and not depend on central compensation.
Abhishek Jain, Partner (Indirect Taxes) at KPMG in India, said, “No decision has been taken by the Council on extending the period of compensation to the states. While some states sought the said extension, some to meet revenue requirements Not wanting to rely on Compensation Cess, industry players will have to wait a little longer to understand the future of Compensation Cess.
Where GST increased, where decreased
The Goods and Services Tax (GST) was exempted on specified food articles and cereals etc., when not branded, or the right to the brand was relinquished. The council has now recommended revising the ambit of exemption to exclude pre-packaged and pre-labeled retail packs including curd, lassi and buttermilk. The rates on some goods and services have also been changed. The change in rates recommended by the 47th GST Council will be effective from July 18.
The Council has also decided to levy GST of 18 per cent on charges charged by banks for issuance of checks (in loose or book form); To bring hotel rooms under 12 per cent GST slab under Rs 1,000 per day as opposed to the tax exempt category at present.
Room rent, excluding ICU, charged by the hospital in excess of Rs 5,000 per day per patient will also be levied at 5 per cent without input tax credit. It has also decided to levy 12 per cent GST on maps and hydrographic or similar charts of all types, including atlases, wall maps, topographical plans and globes, printed.
GST exemption on services provided by RBI, IRDA, SEBI, FSSAI and GST has also been withdrawn. The GST on petroleum/coalbed methane has been increased from 5 per cent to 12 per cent, while that on e-waste has also been increased from 5 per cent to 18 per cent. The tax on scientific and technical equipment supplied to public funded research institutions has been increased from 5 per cent to the “applicable rate”.
The council has reduced GST on ostomy devices (including pouches or flanges, barrier creams, sleeves, irrigation kits, micro-pore tapes, stoma adhesive paste, belts) from 12 per cent to 5 per cent. It has reduced the rate on orthopedic devices (splints and other fracture devices) from 12 percent to 5 percent; body prostheses; other devices that are worn or carried, or implanted in the body, to compensate for a defect or disability; and intraocular lens.
IGST on import of Diethylcarbamazine (DEC) tablets for National Filariasis Eradication Programme, and IGST on specific defense items imported by private entities/vendors, when exempted to end user defense forces.
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