A two-day meeting of the GST council concluded on 29 June 2022, taking a few decisions that were quite surprising. The GST council, in association with the Bommai council, brought about a few major changes in GST rates, releasing the revised GST slab rates in India. The GST new rates are different from the last time. In this article, we will be going through all the major changes in GST rates brought by the government.
Changes In GST Rates and Revised GST Slab Rates In India
The GST new rates are going to be implemented from Monday, July 18, 2022. Exemptions of a few tax-exempt items have been cancelled. Let us now have a look at the commodities and services that will attract a higher GST:
- Pre-packed and branded products like curd, lassi, buttermilk and milk will attract a GST of 5%. Earlier, these items were absolved from GST.
- 18% GST will be levied on the fee charged by banks for issuing cheques (book form or loose).
- Non-ICU hospital rooms with a rent of more than Rs. 5000 per patient per day will attract a GST of 5% without the input tax credit.
- Hotels with rent below Rs. 1000 per night will be imposed with a GST of 12%.
- Charts and maps will be imposed with a GST of 12%.
- LED lights and lamps and fixtures used to attract 12% GST. They will now attract 18% GST.
- Pencil sharpeners, blades, forks, spoons, cake-servers, skimmers, ladles and knives will now attract 18% GST.
- Capital and raw material used in coal bed methane and petroleum exploration will be taxed at 12%. Previously, it was taxed at 5%.
- Solar water heaters and leather products will be imposed with a GST of 12%, a 7% increase from the previous 5%.
- Polished and cut diamonds used to be charged a GST of 0.25%. Now, they will attract a GST of 1.5%.
Under the revised GST slab rates in India, few commodities and services will attract lower GST. Read on to find out what services and commodities will attract lower GST –
- Ropeway transport were used to attract 18% GST. The changes in GST rates have slashed it down from 18% to 5%.
- Renting goods carriages with operators will be cheaper, as GST rates have fallen from 18% to 12%.
Other Major Changes Along With GST New Rates
A major change along with GST new rates is the change in GST registration requirements apropos intra-state trade. To date, online traders have had to fulfil registration requirements different than those of offline traders, regardless of their yearly sales range. With effect from July 18, registration requirements and other legal processes will be made similar for both online and offline traders. GST registration would not be required if annual sales add up to Rs. 40 lakh for trade in goods within the state, and Rs. 20 lakh for trade in services within the state.
Another major change along with GST new rates is that traders who sign up for a presumptive tax scheme, or composition scheme, can trade across states using e-commerce operators from July 18, 2022. January 1 is the expected date by which this particular change is expected to come into force, as e-commerce platforms have to be updated.
Public Reaction To Revised GST Slab Rates In India
While reactions to the changes in GST rates and revised GST slab rates in India are mixed, the public is definitely disappointed by the increase of tax on items of daily usage like curd, milk, cheques, lights, kitchen cutlery, solar water heaters and leather products. It is suggested that a reduction in GST rates in a few areas of the transport sector will not prove to be useful, and the country will not benefit from it.
In fact, many believe it might create an economic crisis in the country. However, the Finance Minister of India, Nirmala Sitharaman is confident about the changes in GST rates and new rules implemented by it.
Are We Heading Towards Crisis Just Like Sri Lanka?
The new GST rates have ensured that prices of daily-usage items will increase. A tax decrease is seen in the ropeway and goods carriage area of the transport sector. GST registration will ease for both online and offline traders with GST registration requirements being altered.
While the Finance Ministry believes that the changes brought in by the GST Council are for the better, it also needs to consider the current Sri Lankan economic and political status as an example, and learn from Sri Lanka’s mistakes. However, Sri Lanka’s income and financial break-up are quite different from that of India, and the changes implemented by the GST council might prove to be highly beneficial for the country as well. Only time will tell.
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