The 47th GST Council meeting, under the chairmanship of Union Finance Minister Nirmala Sitharaman, was held in Chandigarh on June 28 & 29. The Council accepted recommendations for rate rationalization made by different groups appointed by it, resulting in tax changes. The rate changes will be made effective from July 18.
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- The Council accepted recommendations for rate rationalization made by different groups appointed by it, resulting in tax changes.
- The rate changes will be made effective from July 18.
- The GST council decided to ease the process for intra-state supplies made through e-commerce portals. The details of the scheme will be worked out by the Law Committee of the Council. This would come into effect from January 1, 2023.
- The Council decided to refer the report of the GoM (Group of Ministers) on casinos, online gaming and horse racing back to the panel of ministers for further deliberation.
- It has also decided to constitute a group of ministers to address various concerns raised by the states in relation to the constitution of the GST Appellate Tribunal and make recommendations for appropriate amendments in CGST Act.
- Pre-packed and labelled wheat flour, papad, paneer, curd and buttermilk will be taxed at 5 per cent after the GST Council decided to stop allowing exemptions on such items while raising rates on a host of others.
- An 18 per cent GST will be levied on tetra packs, fees charged by banks for the issue of cheques (loose or in book form). Maps and charts including atlases will attract a 12 per cent levy. Goods that are unpacked, unlabelled and unbranded will continue to remain exempt from GST.
- Besides, a 12 per cent tax will be levied on hotel rooms costing less than Rs 1,000 a day. At present, this falls under the exempted category.
- A 5 per cent GST will be levied on hospital room rent above Rs 5,000 per day (excluding ICU).
- Tax rates have been raised to 18 per cent on products such as printing, writing or drawing ink, knives with cutting blades, paper knives and pencil sharpeners, LED lamps, drawing and marking out instruments.
- Solar water heater will now attract 12 per cent GST as compared to 5 per cent earlier.
- Some services such as work contracts for roads, bridges, railways, metro, effluent treatment plants and crematoriums too will see tax going up to 18 per cent from the current 12 per cent.
- Tax has, however, been cut on the transport of goods and passengers by ropeways to 5 per cent and on ostomy appliances to 5 per cent from 12 per cent.
- Renting of truck, goods carriage where the cost of fuel is included will now attract a lower 12 per cent rate as against 18 per cent.
- GST exemption on the transport of passengers by air to and from northeast states and Bagdogra has now been restricted to economy class.
- Services rendered by regulators such as RBI, IRDA and SEBI will be taxed and so will be on renting of a residential dwelling to business entities.
- Also, electric vehicles, whether or not fitted with a battery pack, are eligible for the concessional GST rate of 5 per cent.
GST Council
The introduction of the Goods and Services Tax (GST) regime in the country in 2017 was a very significant step in the field of indirect tax reforms in India. By amalgamating a large number of central and state taxes into a single tax, the aim was to mitigate cascading or double taxation in a major way and pave the way for a common national market.
- Goods and Services Tax Council is a constitutional body for making recommendations to the Union and state governments on issues related to GST.
- The GST Council is chaired by the Union finance minister.
As per Article 279A of the amended Constitution, the GST Council, which will be a joint forum of the Centre and the states, shall consist of the following members:
- The Union finance minister (chairperson).
- The Union minister of state in charge of revenue or finance.
- The minister in charge of finance or taxation or any other minister nominated by each state government.
Every decision of the GST Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles:
i) The vote of the central government shall have a weightage of one-third of the total votes cast, and
ii) The votes of all the state governments taken together shall have a weightage of two-thirds of the total votes cast.
The Council is empowered to make recommendations to the Union and the States on:
1) The taxes, cesses and surcharges levied by the Union, the states and the local bodies which may be subsumed in the goods and services tax.
2) The goods and services that may be subjected to, or exempted from the goods and services tax.
3) Model Goods and Services Tax Laws, principles of levy, apportionment of Integrated Goods and Services Tax and the principles that govern the place of supply.
4) The threshold limit of turnover below which goods and services may be exempted from goods and services tax.
5) The rates including floor rates with bands of goods and services tax.
6) Any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster.
7) Special provision with respect to the states of Arunachal Pradesh, Assam, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.
8) The date on which GST shall be levied on petroleum crude, high speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel.
9) Any other matter relating to the goods and services tax, as the Council may decide.
The mechanism of GST Council would ensure harmonization on different aspects of GST between the Centre and the states as well as amongst the states.
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