Revise Your Budget List: New GST Rates Severely Impact The Prices Of Everyday Items & Services

Goods and Service Tax (GST) rates were revised after the 47th meeting of the GST Council held last month, chaired by Union Finance Minister Nirmala Sitharaman. The changes effected by the revised GST rates had come into effect on Monday (18.07.2022) where there were major changes to the prices of a majority of goods and services.

According to the Central Board of Indirect Taxes and Customs, single packages of food items like pulses, and cereal boxes weighing up to 25 kgs will be considered ‘pre-packaged and labeled’ with five percent GST levied on them. Similarly, there are certain goods and products that will get costlier and some that will get cheaper.

In accordance with the revised GST rates, the following goods and services will get costlier:

• Tetra packs that are used for packaging liquid beverages such as juices and dairy products will now have 18% GST levied instead of the previous 12%.
• Items such as curd, ‘lassi’, and puffed rice, if pre-packaged and labeled will have  GST at the rate of five percent levied on them.
• Items such as cutting blades, pencil sharpeners, cutlery items (spoons, forks, dinner knives, ladles, skimmers) and writing ink will attract 18 % GST.
• Non-ICU hospital rooms with rent above 5000 INR will have five percent GST levied on it.
• 12% GST to be imposed on Hotel tariff rates of up to 1000 INR per day
• 18% GST to be imposed on bank cheque books or loose leaf cheques
• Maps, atlas, globes, and charts will have 12% GST imposed on them
• 18% GST will also be imposed on LED lamps and solar water heaters.
• The taxes on cut and polished diamonds will now be increased to 1.5 percent from 0.25 percent previously
• Finished leather will be taxed at 12% instead of five percent previously
• 18% GST will be imposed on services such as work contracts for roads, bridges, metros, railways, crematoriums, and treatment plants as opposed to 12% before.
• Work contracts for canals, pipelines, education institutions, hospitals, and dams supplied to central and state governments and local authorities will attract 18% GST as compared to 12% before.

However, the following items will get cheaper:

• Electric Vehicles will be eligible for concessional GST at a five percent rate.
• Electric vehicles will be eligible for the concessional GST rate of five percent.
• GST rates on medical items such as Ostomy, Orthopaedic appliances, fracture appliances, prosthetic body parts, and other appliances that are worn, carried or implanted into the body, have reduced to five percent from 12%.
• GST on the renting of trucks and goods carriages where the cost of fuel is included will be reduced to 12% from 18%.
• There will be a GST exemption on the transport of passengers by air, to and from Northeastern states, and Bagdogra for the Economy class.

According to Union Finance Minister Nirmala Sitharamn, an increase in GST rates was carried out to make up for all inefficiencies in the value chain. Despite the mixed reactions of the citizens of the nation, the Finance Minister was of the opinion that there was no opposition to the changes in GST rates from the states and that the majority of the nation has more or less accepted them.

–An Article By Shreya Raolji