The GST rate on hotel rooms with tariffs of up to Rs 7,500 per night has been cut from 18% to 12%.
The Goods & Services Tax (GST) Council chaired by finance minister Nirmala Sitaraman on Friday cut the tax rate on hotel room tariffs, in a move aimed at giving a boost to the hospitality sector.
GST Council also recommended a lower 12% cess on 1,500 cc diesel, 1,200 cc petrol vehicles with the capacity to carry up to 13 people.
Announcing the decisions taken by the 37th GST Council, Sitaraman after meeting in Goa said that the rate changes would be effective from October 1.
The GST rate on hotel rooms with tariffs of up to Rs 7,500 per night has been cut from 18% to 12%.
Similarly, the tax on room tariff of above Rs 7,500 has been slashed from 28% to 18% at present. The room tariffs of upto Rs 1,000 per night will not attract any GST.
Commenting on the decision, Sanjay Sethi, CEO, Chalet Hotels said, "The reduction would give a major fillip to the hospitality and tourism industry and make hotels more competitive globally."
GST Council has also cut tax rates for outdoor catering to 5% from 18%. GST rate on caffeinated beverages has been raised from 18% to 28% with 12% compensation cess.
A uniform GST rate of 12 % will be levied on woven/non-woven polyethylene bags.
Tax rates have been cut on job work in the diamond industry to 1.5% from 5%.
Uniform GST rate of 12% to be levied on polypropylene bags and sacks used for the packing of goods.
The tax on almond milk has been set at 18%, on dried tamarind from 5% to nil, on slide fasteners from 18% to 12%, on wet grinders consisting of stone as a grinder 12% to 5%, on marine fuel from 18% to 5%.
GST rate has been reduced from 18% to 12%for on slide fasteners (zip), from 18% to 5% (.5% FO is added) for marine fuel, from 5% to nil on dried tamarind, plates and cups made of leaves, flowers and other bio-friendly items.
The GST rate has been increased for goods falling under chapter 86 of a tariff like Railway wagons, coaches, rolling stock from 5% to 12% to "address the concerns of Input Tax Credit (ITC) accumulation with suppliers of these goods and services". "This is without refund of accumulated ITC," the minister said.
"We have taken several decisions about the simplification of the tax. A call has been taken for greater simplification clarity," she said.
MAJOR TAKEAWAYS
- The GST rate on hotel rooms with tariffs of up to Rs 7,500 per night has been cut from 18% to 12%
- Similarly, the tax on room tariff of above Rs 7,500 has been slashed from 28% to 18%
- The GST rate has been increased for goods falling under chapter 86 of a tariff like Railway wagons
- Tax rates have been cut on job work in the diamond industry to 1.5% from 5%
(With inputs from Agencies)
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