GST Council in its 37th meeting announced rate cut on a number of items. Finance Minister Nirmala Sitharaman informed in a press briefing after the meeting that the revised GST rates will be effective from October 1.
It is worth mentioning that the auto industry, biscuits industry
was looking for a rate cut after today's meeting. However, the Council did not announce any tax cuts for the two industries. Since the state government did not agree on tax cuts for the auto industry, the Council refused the proposal.
was looking for a rate cut after today's meeting. However, the Council did not announce any tax cuts for the two industries. Since the state government did not agree on tax cuts for the auto industry, the Council refused the proposal.
Here's what will become cheaper and dearer:
1. Hotel stay will become cheaper as Council cuts tax on hotel room tariffs of Rs 1,000 to Rs 7,500 per night to 12% and those above Rs 7,500 to 18%. There will be no GST on hotel room tariffs up to Rs 1,000.
2. GST rate on slide fasteners has been reduced from 18% to 12%.
3. Caffeinated drinks to become costlier as the Council approves proposal to hike rates from 18% to 28%, plus an additional 12% compensation cess.
4. Aerated drinks will no longer be under the compensation scheme.
5. Tax rates on job work in the diamond industry to have been reduced to 1.5% from 5%.
6. Uniform GST rate of 12% will be levied on polypropylene bags and sacks used for the packing of goods.
7. GST rate on railway wagon coaches has been hiked from 5% to 12%.
8. Tax on Marine fuel has been reduced from 18% to 5%.
9. GST on dried tamarind has been reduced to nil from 5%.
10. On wet grinders consisting of stone as a grinder, GST has been cut from 12% to 5%.
11. GST on cups, plates made from flower, leaves and bio-friendly material has been cut to zero from 5%.
12. Compensation cess on petrol motor vehicles with 10-13 person capacity reduced to 1%, while on diesel vehicles it has been reduced to 3%. Earlier, the compensation cess was at 15 per cent.
13. Exemption from GST/IGST is being given on import of specified defence goods not being manufactured indigenously, it's being extended only up to 2024.
14. Supply of goods & services to FIFA and other specified persons also exempted for U17 Women's World Cup in India.
15. GST levied on cut and polished semi-precious stones has been dropped from 3% to 0.25%. Jewellery exports to attract zero GST now.
It is worth mentioning that the GST Council had its 37th meeting in Goa in the backdrop of economic growth hitting a six-year low of 5% for the first quarter of the current fiscal. Demands were pouring in from various sectors such as biscuits to automobiles and FMCG to hotels to reduce tax rates in the wake of the economic slowdown.
The GST council meeting decisions followed the Corporate tax cut announcement made by Finance Minister Sitharaman earlier. In an unprecedented move, FM Sitharaman announced a reduction in corporate tax rates to 22% from 30%. The move is expected to make India an attractive investment destination for foreign investors and help in attracting FDI in the manufacturing sector.
After the Corporate tax cut announcement earlier today, markets soared and witnessed its biggest single-day gain in a decade. The BSE Sensex surged over 2,200 points before settling 1,921 points higher. The Nifty50 index settled 5.32% higher at 11,274.20. Except IT, all sectoral indices ended in the green.
