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GST council to abolish tax exemption on some items, here's what will change

The GST Council on Tuesday approved changes in the tax rates on certain goods and services. Here are the list products that will now attract GST.

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The 47th meeting of the GST Council was held on Tuesday where many important decisions were taken. The GST Council meeting was chaired by Union Finance Minister Nirmala Sitharaman and attended by the state finance ministers. The GST Council on Tuesday approved changes in the tax rates on certain goods and services.

Along with this, the states were also allowed to issue e-way bills for intra-state movement of gold and precious stones. On the first day of the meeting of the GST Council, the policy-making body related to Goods and Services Tax (GST), several compliance related procedures for companies registered in GST and the report of the Group of Ministers (GoM) on prevention of tax evasion were also approved.

Read | Pre-packed labelled food items to attract GST, states continue to seek compensation

The finance ministers of the states are also included in the council headed by Finance Minister Nirmala Sitharaman.

Products that will now attract GST

All products listed below will attract GST if they are labelled food items. This includes pre-packet and labelled meat (except frozen), fish, curd, honey, dried leguminous vegetable, dried makhana, wheat and other cereals, wheat or meslin flour, jaggery, puffed rice.

18% GST on loose or book form cheques

An 18% GST will be levied on the fee charged by banks for the issue of cheques (loose or in book form). Maps and charts including atlases will attract a 12% GST. Goods that are unpacked, unlabelled and unbranded will continue to remain exempt from GST.

Demands of states

Continuing the system of revenue compensation to the states after June 2022 and levying 28% GST on casinos, online games and horse racing will be discussed on Wednesday.

The opposition-ruled states are demanding an extension of the GST compensation system for five years or increasing the states' share of revenue from the current 50% to 70-80%.

Tax on hotel rooms with rents less than Rs 1,000

Group of Ministers (GoM) has suggested abolishing GST exemption on many services. This includes a suggestion to levy tax at the rate of 12% on hotel rooms with rents less than Rs 1,000 per day. No tax is levied on it as of now.

5% GST has also been recommended for hospitalised patients on rooms rented above Rs 5,000 (excluding ICU). The GoM has suggested levying tax on postal services except postcards and inland letters, book posts and envelopes weighing less than 10 grams.

E-way bill

In the context of e-way bills for intra-state movement of gold, jewelery and precious stones, the Council has recommended that states may fix a limit above which it would be mandatory to issue electronic bills. The Group of Ministers has recommended keeping the limit at Rs 2 lakh or above.

In the context of high risk taxpayers, the GoM report has suggested post-registration verification of high risk taxpayers under GST. In order to identify such taxpayers, it has also been talked about verification of electricity bill details and bank accounts.

(With PTI Inputs)

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