Union Finance Minister Nirmala Sitharaman.
Credit: PTI File Photo
The 55th GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman, was held on December 21 in Jaisalmer, Rajasthan. Several key recommendations were announced at the meeting, that will bring about several changes and affect the prices of various goods and services. Representatives of all the states and Union Territories were part of the panel.
Here is the list of items that will become more expensive, cheaper along with the decisions that have been postponed:
What will become more expensive?
Certain items and services will see higher GST rates and increased costs for consumers.
Old and Used Vehicles: 12 per cent to 18 per cent GST will be levied on the sale of old and used vehicles, with the exception of certain petrol and diesel variants. This includes electric vehicles too. This step will have an imapct on the automobiles resale market.
Ready-to-Eat popcorn: Pre-packed and labelled ready-to-eat snacks will see an additional tax of 12 per cent, while caramelised popcorn will attract 18 per cent GST. Currently, ready to eat popcorn mixed with salt and spices which is not pre-packed and labelled has 5 per cent GST.
Autoclaved aerated concrete blocks: Autoclaved aerated concrete blocks will attract 12 per cent GST if it contains more than 50 per cent fly ash.
Sponsorship services by corporates: Sponsorship services by corporates have been brought under forward charge mechanism, which will lead to increase in costs for sponsors.
Penalty-only appeals: Higher pre-deposits for penalty-only appeals under the Appellate Authority will be applicable.
What will become cheaper?
A number of items and services will see a reduction in GST rates, offering financial relief to customers.
Fortified rice kernels (FRK): The GST rate on fortified rice kernels will be reduced to 5 per cent when supplied through the public distribution system. This is to ensure economically weaker sections of society can afford nutritious food.
Gene therapy: In order to promote advancements in medicle treatments and make it more accessible, gene therapy has been exempted from GST.
Food preparation for free distribution: A concessional 5 per cent GST rate has been extended to food inputs supplied under government programs for economically weaker sections.
Systems for Long Range Surface-to-Air Missile Assembly (LRSAM): Systems, sub-systems, and tools used for LRSAM manufacture will be exempt from IGST. Imports of equipment and consumable sampled for inspection by the International Atomic Energy Agency will also be exempted from IGST.
Pepper and raisins (Direct sales): Pepper and raisins directly sold by agriculturists have been clarified as not liable to GST, ensuring relief to farmers.
Other updates
In an attempt to clarify certain existing policies, the council has announced certain updates:
Vouchers: Transactions involving vouchers have not been listed under supply of goods or services; hence, they will be exempted from GST. Provisions related to vouchers are also being revised.
Penal charges: Non-compliance with loan terms, penalties by banks, and Non-Banking Financial Companies (NBFCs) will not attract GST.
Reduction in pre-deposit for appeals: A reduction in pre-deposit required when filing an appeal before the Appellate Authority in cases where the order in question involves only penalty amounts, has been recommended by the council in order to make the process of appeal more accessible and financially burden-free for the people.