Major GST rate changes take effect from Monday

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NEW DELHI : Products such as prepackaged and labeled groceries and services such as expensive non-critical care hospital stays are expected to attract the Goods and Services Tax (GST) from Monday, while the tax on certain medical supplies and Transportation services are expected to decline as a series of GST Board decisions take effect.

Thus, services provided by clinical establishments using rooms other than intensive care units, intensive care units, cardiac intensive care units and neonatal intensive care units for which the rent is higher than 5,000 per day will attract a 5% tax.

In addition, a 5% GST will apply to pre-packaged and labeled items like rice, flour, meat and curds as part of efforts to tackle alleged tax evasion by companies using labels without brand to take advantage of the tax exemption available for certain food products. .

Prepackaged and labeled specified products (without registered brand name) such as wheat, rice, maize, makhana, specified flours, etc. would be subject to 5% GST from July 18, which would increase the cost to the customer, said Saurabh Agarwal, tax partner. at EY India.

The rate changes are part of the GST Board’s decision last month to correct tax anomalies across a host of industries and broaden the tax base while providing relief to certain sectors.

As part of this, the GST rate on items such as ostomy appliances used by certain patients, orthopedic equipment such as splints and other fracture appliances, and artificial body parts will be reduced from 12% to 5%. Likewise, the transport of goods and passengers by ski lift will drop from 18% to 5%, while the rental of trucks and goods transport vehicles, including the cost of fuel, will drop from 18% to 12%.

Importation of diethylcarbamazine tablets is exempt from IGST levy, if provided free of charge for the National Filariasis Elimination Program, the Central Board of Excise and Customs (CBIC) said in an article on Sunday. posted on social media.

Other items on which a higher rate of GST will apply include printing, writing and drawing ink, knives, spoons and forks and electric pumps on which an 18% GST will apply. will apply from Monday, compared to 12% previously. Some agricultural and dairy equipment that previously attracted 5% or 12% GST will now attract 18%. Also, solar water heaters and prepared leather will attract 12%, compared to 5% so far.

The rate changes should help boost revenue and reduce litigation by preventing some claims that are disputed. However, the rate hike cases could face criticism from opposition parties as they coincide with the start of the monsoon session of parliament. A government official told Mint that the changes were made on the recommendation of many states that were losing revenue due to low GST rates.

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