GST rule changes from January 1: Know what will get expensive, cheaper in 2022

A number of rule changes to the Goods and Service Tax (GST) will be applicable on different products and services from January 1. These revisions range from ecommerce, online food delivery and taxi services to textile and footwear products. While some of these changes are not expected to impact consumer expenditure, some are likely to make prices of specific items go up or down.

Check out the GST rule changes from coming Saturday (January 1, 2022) and the prices of which products and services are likely to be impacted.

Clothing and footwear prices likely to go up

From January 1, the government will enforce the inverted duty structure correction for the textile and footwear sectors. Up from 5%, all shoes and other footwear will be subject to 12% GST irrespective of the price. Similarly, all textile products, apart from cotton garments (including premade) will also be under the 12% GST.

This also includes clothing, footwear items which cost up to Rs 1,000, woven fabrics, synthetic yarn, blankets, tablecloths, tents etc.

Price of Auto-rickshaw rides through online cab aggregators

The government has removed the existing exemption, and auto rides books online will now come under the 5% GST slab along with other vehicles. While hailing autos offline or manually will remain tax-free, that will not be the case if you order an auto from cab aggregators like Uber and Ola.

On the other hand, the prices of cabs could come down with the 5% GST compared to the 6% service tax charged from riders of radio or app-based taxis previously.  

5% GST on food delivery by online apps

The new GST rule change will need food delivery apps like Swiggy and Zomato to collect the 5% GST from customers instead of restaurants from where food orders are delivered. This revision was done to prevent revenue leakage by unregistered restaurants.

For customers, this is not necessarily bad news. The rule change does not add extra tax burden on consumers ordering meals from GST-registered restaurants. The move instead will bring unregistered restaurants under the tax slab. Therefore, food delivery is unlikely to cost dearer.