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GST Rates Revised at the 31st GST Council Meet

The GST Council has reviewed the tax slabs, slashing rates on several items at the 31st Goods and Services Tax (GST) Council Meet. Among the things set to get cheaper are movie tickets. Announcing the slab rehab, Finance Minister Arun Jaitley said that the government wanted to keep the GST rates close to the original rates. But there were differences in case of some items because of the changes in the economy as well as customer preferences.

Some commodities were kept in the high tax bracket (18-28%) but on scrutinizing the list, they found that these commodities should be considered as necessities and not luxuries. This is why the GST rates were revised for commodities such as notebooks, exercise books, spectacles and lenses and some other items and the new GST rates will be effective from January 1, 2019.

There were 34 items in the 28 per cent tax bracket which included luxury and ‘sin goods’ till now. However, the GST Council in its meeting on Saturday decided to take out 6 items from this list. With the latest development, the number of items in the top slab comes down to 28, including luxury goods, a few automobile and cement items. The GST rates on special flights for pilgrims have come down to 5% and 12% for economy and business class, respectively. Movie tickets priced below ₹100 would now attract 12% GST, falling from the previous 18% rate. On the other hand, tickets priced above ₹100 would be charged at 18%, falling from the top slab of 28%. Power bank of lithium ion batteries, small sport related items, carriage accessories for disabled and video games are brought down from the top slab to the immediate below 18%. Monitors and television screens, as well as tyres would come with a GST levy of 18%, which was earlier sitting in 28%. IMM courses and bank charges with respect to savings account, Jan Dhan Yojana are exempted from the GST levy.

 

List of Goods and GST Slabs

 

No Tax

 

• Goods – No taxes will be levied on goods like sanitary napkins, deities made of stone, marbles or wood, Rakhis without any precious metals like gold, silver, raw material used in brooms, Saal leaves and fortified milk, fruits, vegetables, bread, salt, bindi, curd, sindoor, natural honey, bangles, handloom, besan, flour, eggs, stamps, printed books, judicial papers, newspapers.

• Services – All hotels and lodges which carry a tariff below ₹1,000 are exempted from taxes under GST. The list also includes IMM courses and bank charges on savings account, Jan Dhan Yojana.

GST Tax Slab of 5%

 

• Goods – The goods which will attract a taxation of 5% under GST include skimmed milk powder, fish fillet, frozen vegetables, coffee, coal, fertilizers, tea, spices, pizza bread, kerosene, ayurvedic medicines, agarbatti, sliced dry mango, insulin, cashew nuts, unbranded namkeen, lifeboats, Ethanol – Solid biofuel pellets – Handmade carpets and other handmade textile floor coverings (including namda/gabba)- Hand-made braids and ornamental trimming in the piece.

• Services – Small restaurants along with transport services like railways and airways, Standalone ACs non-ACs Restaurants and those which serve liquor, Takeaway Food, Restaurants in hotels with a room tariff less than 7,500 (no input credit for these restaurants), will come under this category. Special flights for pilgrims (Economy Class) come under 5%.

GST Tax Slab of 12%

• Goods – Items coming are the tax slab of 12% including frozen meat products, butter, cheese, ghee, pickles, sausage, fruit juices, namkeen, tooth powder, medicine, umbrella, instant food mix, cell phones, sewing machine, man-made yarn, -Handbags including pouches and purses; jewellery box, Wooden frames for painting, photographs, mirrors etc, Ornamental framed mirrors, Brass Kerosene Pressure Stove, Art ware of iron, etc.

• Services – Business class air tickets will attract a tax of 12% under GST. The slab also includes movie tickets priced under 100.

GST Tax Slab of 18%

• Goods – Most of the items are part of this tax slab. Some of the items are flavoured refined sugar, cornflakes, pasta, pastries and cakes, detergents, washing and cleaning preparations, safety glass, mirror, glassware, sheets, pumps, compressors, fans, light fitting, chocolate, preserved vegetables, tractors, ice cream, sauces, soups, mineral water, deodorants, suitcase, brief case, vanity case, oil powder, chewing gum, hair shampoo, preparation for facial make-up, shaving and after-shave items, washing powder, Refrigerators, Water Heaters, Washing Machines, Televisions (up to 68 cm), Vacuum Cleaners, Paints, Hair Shavers, Hair Curlers, Hair Dryers, Scent Sprays, Lithium-ion batteries, detergent, stones used in flooring, marble & granite, sanitaryware, leather clothing, wrist watches, cookers, stoves, cutlery, telescope, goggles, binoculars, oil powder, cocoa butter, fat, artificial fruits, artificial flowers, foliage, physical exercise equipment, musical instruments and their parts, stationery items like clips, some diesel engine parts, some parts of pumps, electrical boards, panels, wires, razor and razor blades, furniture, mattress, cartridges, multi-functional printers, door, windows, aluminium frames, monitors and television screens, tyres, power banks for lithium ion batteries, video games, carriage accessories for disabled, etc.

• Services – Restaurants located inside hotels with tariffs of 7,500 and above, outdoor catering(input tax credit to be available), movie tickets priced above 100, actual bill of hotel stay below 7,500, IT and Telecom services and financial services along with branded garments will be part of this tax slab.

GST Tax Slab of 28%

• Goods – Over 200 goods will be taxed at a rate of 28%. The goods which will be part of this category under GST are sunscreen, pan masala, dishwasher, weighing machine, paint, cement, vacuum cleaner. Other items include automobiles, hair clippers, and motorcycles.

• Services – As mentioned above, five-star hotels, whose actual bill of hotel stay above 7,500, racing, movie tickets and betting on casinos and racing will come under this category.

Here is a summarised version of the list of rate cuts on both Goods and Services:

Others:
* GST on the composite supply of goods attracting 5% GST rate where it is supplied along with the supply of construction services and other goods for solar power plant, is now levied as follows –
• 70% of value is considered as supply of goods and taxed at 5% GST.
• Remaining 30% of the EPC contract value is supply of service and attracts standard tax rate for service.

* Rate of 5%/18% to be applied based on transaction value of footwear.

* Uniform GST rate of 12% on Flexible Intermediate Bulk Container (FIBC) from existing 5%/12% (depending on the value).

 

Goods recommended for exemption

• Supply of gold by Nominated Agencies to exporters of article of gold Jewellery.

• Proceeds received by Government from auction of gifts received by President, Prime Minister, Governor or Chief Minister of a State and public servants, the proceeds of which is used for public or charitable cause.

• Vehicles imported for temporary purposes under the Customs Convention on the Temporary importation of Private Road Vehicles (carnet de passages-en-douane) will be exempt from IGST and Compensation cess.

 

Services recommended for exemption

 

• Services supplied by banks to Basic Saving Bank Deposit (BSBD) account holders under

• Pradhan Mantri Jan Dhan Yojana (PMJDY)