The all-powerful GST (goods and services tax) Council on Friday made some major changes in the tax rate of goods and services with a view to addressing sectoral concerns in a slowing economy. These tax changes have come on a day when the government announced big reductions in corporate tax rates to boost private investments and pull the economy out of a six-year low growth and a 45-year high unemployment rate.
The 37th meeting of the GST Council was headed by Finance Minister Nirmala Sitharaman along with the representatives of all states. While the council did not take a decision on cutting tax on automobiles as well as items like biscuits, it made some changes in the tax rates of hotel tariffs and caffeinated beverages. In all, the GST Council revised rates on 20 goods and 12 services. The minister said the rate changes shall be made effective from October 1.
Hotel room tariffs: In order to boost the hospitality industry and tourism, the GST on hotel rooms with tariffs of up to Rs 1,000 per night will be nil. Furthermore, hotel room tariffs between Rs 1,001 and Rs 7,500 per night has been cut to 12 percent from the existing 18 percent. Also, the tax on room tariff of above Rs 7,500 has been slashed to 18 percent from the existing 28 percent.
Nirmala Sitharaman announced that import of specified defence goods not being manufactured indigenously, the supply of goods and services to FIFA for organising under-17 Women's Football World Cup in India, and supply of goods and services to Food and Agriculture Organisation (FAO) for specified projects in India has been exempt from GST. The Council also exempted fishmeal as well as pulley, wheels and other parts for agricultural machinery from GST for specified periods. 5 percent GST would be applicable on specified goods used for oil and gas exploration and production under the licensing policy.
(with PTI inputs)