With an aim to simplify and rationalise taxation, GST Council on Friday announced a host of measures ranging from increasing rates on caffeinated drinks to reducing tariff on hotel rooms.
The GST Council on Friday announced a host of measures ranging from increasing rates on caffeinated drinks to reducing tariff on hotel rooms with an aim to simplify and rationalise taxation. The rates on caffeinated drinks such as coffee were hiked to 28 per cent from 18 per cent, while the rates on hotel rooms with tariff above Rs 7,500 have been cut to 18 percent, down from 28 percent. Finance Minister Nirmala Sitharaman said that the Council also approved nil GST rates on hotels with tariff up to Rs 1,000. The meeting which was held in Goa today also saw GST rate on diamonds getting cut to 1.5 per cent from the earlier 5 per cent. In addition, the almond milk GST rate has been set at 18 per cent by the Council. A uniform GST rate of 12 percent was approved on polypropylene and polyethylene (woven and non-woven) whether or not laminated for packing.
The GST on railway wagons, and coaches was increased to 12 percent, up from 5 percent. The GST cess on 10-13 seater passenger vehicles has been cut to 1 from the earlier 3 percent. The Council also decided to make annual return optional for small taxpayers below the annual threshold of Rs 2 crore for FY18 and FY19. Finance Minister Nirmala Sitharaman also said that the GST Council exempted silver imported for re-export as jewellery from GST. Also, the tax rate on supply of machine job cut to 12 per cent from 18 per cent. The supply of goods and services to FIFA and other specified persons has also been exempted for U17 Women’s World Cup in India, said Nirmala Sitharaman.
Nirmala Sitharaman’s announcements and the GST council’s meeting come at a time when the annual economic growth fell to a 25-quarter low of 5 per cent in the first quarter of fiscal year 2020. In the last meet, the GST rate on electric vehicles (EV) was slashed from 12 per cent to 5 per cent. In addition, the GST rate on charging stations for electric vehicles was reduced from 18 per cent to 5 per cent.
Meanwhile, Finance Minister Nirmala Sitharaman earlier in the day announced a slew of fresh measures to boost the slowing economy. The effective corporate tax rate was slashed to 25.17 per cent inclusive of all cess and surcharges for domestic companies. Adding, she said that the firms opting for 22 per cent income tax slab would not have to pay a minimum alternative tax (MAT).