New GST Rates: In the 47th meet of the GST Council that was held last month in Chandigarh, there was certain revision of GST rates. The revised rates come into effect on 18 July 2022. In order to increase revenues, finance Minister Nirmala Sitharaman decided on some major changes to the goods and services tax. The 5% slab of GST now includes packed foods such as Paneer, curd, and milk. Additionally, there were also changes in the applicability of GST on solar water heaters, leather products, and hotels charging less than rupees 1000 for a day. The GST rate hike is presently being criticised due to the expensive pricing that shall result from the new change. Check all the details pertaining to new GST rates and check the list of goods and services that are now expensive and cheap in the following article.
New GST Rates 2022
To overcome the problem of decreased revenues, a two-day GST council meet was organised in Chandigarh in the month of June. The 47th meet was attended by finance Minister Nirmala Sitharaman. Major discussions on the goods and services tax were observed in the meeting. As a consequence, there was a revision in the GST rates. It was announced that the revised rates will come into effect from Monday, 18 July 2022. Certain foods which were divided into categories of packed and unpacked were included in the 5% slab of GST. Moreover, there were products such as that leather, solar water heaters, and services of hotels that charge rupees thousand or less which were included in the 12% slab of GST.
The tetra packs and services by RBI, IRDA, and SEBI were also included in the 18% slab. There are certain products and services that have noticed a hike in their cost post the applicability of the goods and services tax. However, products like electric vehicles, trucks, vehicles, orthopaedic devices, and much more have seen a decrease in the price slab after the GST was reduced on them.
5% Slab Inclusion for New GST Rates
The following product will now be applicable for 5% GST. The pricing of this product will increase due to the inclusion of the goods and services tax on them. The MRP will now include and hike due to the addition of 5% of the tax. These basic necessities getting expensive is becoming a major concern for the common public along with the opposition leaders. The present government has defended their decision by calling it a measure to increase revenue. All the changes that have been made with the goods and services tax and all with the purpose of increasing the revenue. The pricing will come into effect on 18 July 2022. Check what is getting expensive in the subsequent space:
- Packed food items such as curd, Paneer, and milk or now included under the slab of 5% GST.
- Packed foods such as cereals, pulses, and wheat flour.
- Services of hospital rooms of Non-ICU which are priced for more than Rs.5,000 for a day will also be applicable for 5% GST.
12% GST Slab Inclusion
Another slab for GST is 12%. Certain services that are provided to the public will now be included under the 12% slab. There are no major basic necessities that have been included in this lab. However, a hike in affordable hotel rooms price is being awfully criticized. The following services will now get expensive since a 12% tax will be levied on them:
- Hotel rooms charge an amount of Rs.1000 or lesser for a day or are now applicable for 12% goods and services tax.
- Maps and charts along with atlases will also become expensive as 12% GST will be applicable on them.
- Solar water heaters were under the bracket of 5% GST. However, post-18 July 2022, they shall be observing an increase in pricing since 12% GST will be applicable to them.
- Leather products will also become expensive from 18 July 2022. The government will levy of GST charge of 12% on finished goods such as leather.
18% Slab Inclusion under New GST Rates
Another bracket for GST is 18%. The government has also included certain products and services under this slab from 18 July 2022. One major problematic inclusion is that of tetra packs. Along with that, instruments that are useful for writing and drawing will also get costlier. The following is the list of the precise services and products that will now be expensive since 18% GST is applicable to them:
- Products that are available in the packaging of tetra packs will be costlier since they were included in the 18% GST slab.
- The services offered by banks for the issue of cheques, loose or in form of a book.
- Services offered by the Reserve Bank of India, IRDA, and SEBI, will also be now expensive due to the applicability of 18% GST.
- LED lamps will also be now expensive since they will be applicable for 18% GST.
- Instruments and goods that are used for the purposes of printing, writing, and drawing along with ink will also be costlier since the hour is included under the 18% GST slab.
- Work contracts for roads, railways, Metro, crematoriums, bridges many more relative services will become expensive since they will be applicable for 18% of goods and services tax.
Products and Services that will get cheap from 18 July 2022
The government has also declared a decrease in the pricing of certain services and products as they have reduced the GST slab applicable to them. The new taxation will be applicable from 18 July 2022. Check the following products and services that are getting cheaper:
- Trucks and vehicles which were applicable for 18% GST will now only be applicable for 12% slab of GST.
- The rent of carriages that carry goods will also decrease since it is now excluded from the 18% slab and is included in the 12% GST slab.
- The government has reduced the applicability of GST on Ostomy appliances. They are now included under the 5% GST slab.
- Selected collection of orthopaedic services will also get cheaper since it shall only be applicable for 5% GST instead of 12%.
- Electric vehicles will get cheaper from 18 July 2022. A 12% GST is applicable to them before the new revision. From now on, only 5% of the GST tax slab will be applicable.
- Equipment that is utilized for residual evacuation by the services of Ropeway will get cheap. Earlier, 12% GST as applicable to them. However from now on with effect from 18 July 2022, only 5% GST will be applied to them.
- Equipment used for transportation will get reduced in terms of pricing since only 5% GST will be applicable to them.
The government has continued to exempt goods and services tax on certain products. The following products will not get expensive or cheap cost 18 July 2022. GST will continue to not be applicable on the following products:
- Transportation charges for flights in economy class, to and from north-eastern states, and the city of Bagdogra will continue to be the same since no GST applies to them.
- No GST will be applicable on unpacked, unlabelled, and unbranded foods and goods just as it was before.
No, GST will continue to be exempted from unpaid, unbranded, and unlabelled food products or any other goods.
Trucks and other vehicles will get cheaper after 18 July 2022. Earlier, an 18% GST was applied to them. From now on, only 12% GST will get applicable to these products.
From now on, packed foods such as milk, curd, packed pulses, cereals, and tetra packs will get expensive.