GST Council: Tax On Caffeinated Drinks Hiked, Hotel Tariffs Reduced


The all-powerful GST Council on Friday more than doubled the tax on caffeinated beverages to 40 percent and slashed the rate on hotel room tariffs.

Written By Press Trust Of India | Mumbai | Updated On:

The all-powerful GST Council on Friday more than doubled the tax on caffeinated beverages to 40 percent and slashed the rate on hotel room tariffs. Briefing reporters after a meeting of the panel, Finance Minister Nirmala Sitharaman said the GST on caffeinated beverages has been hiked to 28 percent plus an additional cess of 12 percent as against the current rate of 18 percent.

For hotels, she announced nil tax for those with tariffs of up to Rs 1,000 per night. Hotels charging Rs 1,001 to Rs 7,500 per night room tariff would be levied with 12 percent tax as against the existing 18 percent. Similarly, the tax on room tariff of above Rs 7,500 has been slashed to 18 percent from the existing 28 percent. Also, tax on outdoor catering has been reduced to 5 percent from existing 18 percent with an input tax credit, she said.

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The GST was also cut on marine fuel to 5 percent while the same on railway wagons, coaches, the rolling stock has been increased from 5 percent to 12 percent. Exemption from the GST has been given to imports of specified defence goods that are not manufactured in India.

A uniform GST rate of 12 percent will be levied on woven/non-woven polyethylene bags. The cess levied on top of the maximum 28 percent tax rate on petrol vehicles with the capacity to carry 10-13 persons has been reduced to 1 percent and the same for diesel vehicles has been cut to 3 percent.

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The tax on almond milk has been set at 18 percent, she said adding all rate changes would be effective from October 1. The GST on slide fasteners (zips) has been reduced to 12 percent from 18 percent earlier.  

Also, the tax on diamond job work has been reduced to 1.5 percent from 5 percent earlier. The same on the supply of machine job cut to 12 percent from 18 percent.

Here are the key announcements:

  • GST hiked on caffeinated beverages to 18% plus 12% cess from current 18%
  • GST rate hiked on railway wagon, coaches from 5% to 12%
  • GST rate on slide fasteners has been reduced from 18% to 12%
  • GST rate on marine fuel reduced from 18% to 5%
  • GST on wet grinders consisting of stone as a grinder reduced from 12% to 5%
  • GST on dried tamarind reduced from 5% to nil
  • Exemption from GST/IGST for import of specified defence goods not being manufactured indigenously, it's being extended only up to 2024
  • Supply of goods & services to FIFA & other specified persons also exempted for U17 Women's World Cup in India
  • Lower 12% cess on 1,500 cc diesel, 1,200 cc petrol vehicles with capacity to carry up to 13
  • Uniform GST rate of 12% to be levied on polypropylene bags and sacks used for packing of goods

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