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Pre-packed and labelled food products to draw 5% GST; 28% GST on online gaming recommended

The tax rate changes will come into effect from July 18

Pre-packed and labelled wheat flour, papad, paneer, curd and buttermilk will be taxed at 5% after the GST Council decided to stop allowing exemptions on such items while raising rates on a host of others.

The ending of exemption would mean pre-packed and labelled meat (except frozen), fish, paneer, lassi, honey, dried leguminous vegetables, dried makhana, wheat and other cereals and puffed rice (muri) will now attract a 5% tax.

The tax rate changes will come into effect from July 18.

The council decided to refer the report of the GoM (Group of Ministers) on casinos, online gaming and horse racing back to the panel of ministers for further deliberation. The panel had recommended a 28% GST levy on all three activities and equalled them to gambling.

The report is expected to be ready by July 15 and would be taken up by the council in its next meeting in August.

Similarly, an 18% GST will be levied on tetra packs, fees charged by banks for the issue of cheques (loose or in book form). Maps and charts including atlases will attract a 12% levy. Goods that are unpacked, unlabelled and unbranded will continue to remain exempt from GST.

Besides, a 12% tax will be levied on hotel rooms costing less than Rs 1,000 a day. At present, this falls under exempted category.

A 5% GST will be levied on hospital room rent above Rs 5,000 per day(excluding ICU).

Tax rates have been raised to 18% on products such as printing, writing or drawing ink; knives with cutting blades, paper knives and pencil sharpeners; LED lamps, drawing and marking out instruments.

Services rendered by regulators such as RBI, IRDA and SEBI will be taxed and so will be on renting of a residential dwelling to business entities.

Also, electric vehicles whether or not fitted with a battery pack, are eligible for the concessional GST rate of 5%.

The GST council also decided to ease the process for intra-state supplies made through e-commerce portals. Now such suppliers will not have to obtain GST registration, if their turnover is lower than Rs 40 lakh and Rs 20 lakh for goods and services, respectively. This would come into effect from January 1, 2023.

The council has also decided to constitute a group of ministers to address various concerns raised by the states in relation to the constitution of the GST Appellate Tribunal and make recommendations for appropriate amendments to the CGST Act.

The GoM on IT reforms, inter alia, recommended that the GSTN should put in place the AI/ML (Artificial Intelligence/Machine Learning) based mechanism to verify the antecedents of the registration applicants and improve risk-based monitoring of their behaviour post-registration so that non-compliant taxpayers could be identified in their infancy and appropriate action be taken so as to minimise risk to the exchequer.

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