Customers will have to pay 5% Goods and Service Tax (GST) on pre-packed, labelled food items like atta, paneer and curd, besides hospital rooms with rent above Rs 5,000 from Monday, July 18, with the GST Council's decision coming into force. In addition, hotel rooms with tariff of up to Rs 1,000 per day, along with maps and charts (including atlases), will attract a 12% GST, while 18% GST will be levied on tetra packs and fees charged by banks for the issue of cheques (loose or in book form).
Last month, the GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising her state counterparts, had pruned the exemption list and imposed tax on a host of goods and services. The Council, based on an interim report of the Group of Ministers (GoM) on rate rationalisation, had also removed duty inversion for goods, where the taxes on inputs were higher than those on the output.
Tax rates on products such as printing, writing or drawing ink; knives with cutting blades, paper knives and pencil sharpeners; LED lamps and drawing and marking-out instruments will be hiked to 18% on Monday, from 12% currently, to correct the inverted duty anomaly. Additionally, solar water heaters will now attract 12% GST as compared to 5% earlier. Some services such as work contracts for roads, bridges, railways, metro, effluent treatment plants and crematoriums too will see tax going up to 18% from the current 12%. Besides, taxes will be cut on ostomy (surgical creation of an opening in an organ of the body) appliances and on transport of goods and passengers by ropeways to 5% from July 18, from 12%.
Renting of trucks and goods carriages where the cost of fuel is included will now attract a lower 12 per cent rate as against 18 per cent. GST exemption on the transport of passengers by air to and from northeastern states and Bagdogra will be restricted to economy class only. Services rendered by regulators such as RBI, IRDA and SEBI will be taxed at 18 per cent and so will be renting of a residential dwelling to business entities.
Bio-medical waste treatment facilities shall attract 12% GST, while non-ICU hospital rooms exceeding Rs 5,000/day will be levied 5% GST, without input tax credit, to the extent of the amount charged for the room. Besides, individuals will only be able to claim GST exemption for training or coaching in recreational activities relating to arts or culture or sports. Also, electric vehicles, whether or not fitted with a battery pack, would be eligible for the concessional GST rate of 5 per cent from July 18.