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Current Affairs

GST council rate cuts

Date: 21 September 2019 Tags: Commerce & Industry

Issue

The Goods and Services Tax (GST) Council has cut taxes on hotel accommodation, outdoor catering, cut and polished semi-precious stones and lowered cess on passenger vehicles during its review meeting.
 

Background

The GST rates were slated for a tweak considering growing demands from various sectors to review the rates such as automobile and consumer goods.

 

GST rate changes

  • The GST rate on hotel rooms with tariffs above ?7,500 per day, which is presently 28%, has been reduced to 18%, while the tax on rooms with a transaction value of ?1001 to ?7,500 per day will be 12%, down from 18% currently.

  • The tax levied on caffeinated beverages has been raised from 18% to 28% with an additional compensation cess of 12%, in an attempt to deter their consumption.

  • The tax levied on wet grinders that consist of stone, has been slashed from 12% to 5%, while the GST on dried tamarind and plates/cups made up of leaves, flowers or bark have been reduced to nil from 5%.

  • Zero GST on the export of jewellery and a reduction in the GST levied on cut and polished semi-precious stones from 3% to 0.25%.

Reduction in the cess on large passenger vehicles that can carry 10 to 13 persons. The cess on such vehicles will be reduced from 15% over and above the 28% GST rate, to 1% for petrol vehicles of certain specifications and 3% for diesel vehicles.