The recent 55th GST Council meeting introduced several changes to Goods and Services Tax (GST) rates, impacting various sectors. Here’s a detailed breakdown:
What’s Getting Cheaper?
The following items and services now have reduced GST rates, providing financial relief:
- Fortified Rice Kernels (FRK):
- Old Rate: 18%
- New Rate: 5% (when supplied via PDS).
- Gene Therapy:
- Old Rate: 12%
- New Rate: Fully exempt.
- Inputs for Food Preparations under Government Schemes:
- Old Rate: 18%
- New Rate: 5%.
- Systems for Long-Range Surface-to-Air Missile (LRSAM) Assembly:
- Old Rate: Standard IGST rates applied.
- New Rate: Fully exempt.
- Inspection Equipment for IAEA:
- Old Rate: Standard IGST rates applied.
- New Rate: Fully exempt.
- Pepper and Raisins (Direct Sales by Agriculturists):
- Old Rate: Taxable under applicable GST rates.
- New Rate: Exempt.
What’s Getting Costlier?
The following items and services now have higher GST rates, increasing costs:
- Old and Used Vehicles (Including EVs):
- Old Rate: 12%
- New Rate: 18%.
- Ready-to-Eat Popcorn (Pre-Packaged and Labeled):
- Old Rate: 5%
- New Rate: 12%.
- Caramelized Popcorn:
- Old Rate: 12%
- New Rate: 18%.
- Non-pre-packaged or “namkeen” popcorn: No change (remains at 5%).
- Autoclaved Aerated Concrete (ACC) Blocks (with >50% Fly Ash):
- Old Rate: 5%
- New Rate: 12%.
- Corporate Sponsorship Services:
- Old Mechanism: Reverse Charge
- New Mechanism: Forward Charge.
Other Policy Updates:
- Vouchers:
- Clarified as neither goods nor services, exempt from GST.
- Penal Charges by Banks/NBFCs:
- No GST on penalties for loan non-compliance.
- Definition of ‘Pre-Packaged and Labeled’:
- Aligned with the Legal Metrology Act for retail goods ≤25 kg/liters with mandatory labeling.
These updates aim to balance affordability in critical sectors like healthcare and agriculture while optimizing government revenue in others like automobiles and construction.
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