28% tax on casino, online gaming put off for deliberation
In what will further hurt the middle class, pre-packed and labelled wheat flour, papad, paneer, curd, and buttermilk will be taxed at 5 per cent after the GST Council on Wednesday decided to stop allowing exemptions on such items while raising rates on a host of others.
The GST Council, at a two-day meeting here, accepted recommendations for rate rationalisation made by different groups appointed by it, resulting in tax changes, Union Finance Minister Nirmala Sitharaman told reporters. The tax rate changes will come into effect from July 18.
However, the council decided to refer the report of the GoM (Group of Ministers) on casinos, online gaming and horse racing back to the panel for further deliberation.
The Finance Minister of Goa wanted further discussions on the GST rate to be applicable on casinos and in that context both online gaming and horse racing too would be relooked. The panel had recommended 28 per cent GST levy on all three activities and equalled them to gambling. The report is expected to be ready by July 15 and would be taken up by the council in its next meeting in August.
The ending of the exemption would mean the pre-packed and labelled meat (except frozen), fish, paneer, lassi, honey, dried leguminous vegetables, dried makhana, wheat and other cereals and puffed rice (muri) will now attract a 5 per cent tax.
Similarly, an 18 per cent GST will be levied on tetra packs, fees charged by the banks for the issue of cheques (loose or in book form).
Maps and charts, including atlases, will attract a 12 per cent levy. Goods that are unpacked, unlabelled and unbranded will continue to remain exempt from the GST.
Besides, a 12 per cent tax will be levied on hotel rooms costing less than Rs 1,000 a day. At present, this falls under the exempted category. A 5 per cent GST will be levied on hospital room rent above Rs 5,000 per day (excluding ICU).
Tax rates have been raised to 18 per cent on products such as printing, writing or drawing ink, knives with cutting blades, paper knives and pencil sharpeners, LED lamps, drawing and marking out instruments. Solar water heaters will now attract 12 per cent GST as compared to 5 per cent earlier.
Some services such as work contracts for roads, bridges, railways, metro, effluent treatment plants and crematoriums too will see tax going up to 18 per cent from the current 12 per cent.
Tax has, however, been cut on the transport of goods and passengers by ropeways to 5 per cent and on ostomy appliances to 5 per cent from 12 per cent.
Renting of truck, goods carriage where the cost of fuel is included will now attract a lower 12 per cent rate as against 18 per cent.
The GST exemption on the transport of passengers by air to and from north-eastern States and Bagdogra has now been restricted to economy class.
Services rendered by regulators such as the RBI, the IRDA and the SEBI will be taxed and so will be on renting of a residential dwelling to business entities. Also, electric vehicles whether or not fitted with a battery pack, are eligible for the concessional GST rate of 5 per cent.
The GST Council also decided to ease process for intra-State supplies made through e-commerce portals. Now such suppliers will not have to obtain GST registration, if their turnover is lower than Rs 40 lakh and Rs 20 lakh for goods and services, respectively. This would come into effect from January 1, 2023.
The council has also decided to constitute a group of Ministers to address various concerns raised by the States in relation to the constitution of the GST Appellate Tribunal and make recommendations for appropriate amendments in the CGST Act.
Meanwhile, about a dozen States cutting across party lines on Wednesday pitched for extending the mechanism to compensate States for revenue lost from the implementation of the GST beyond June 30, but no decision was taken.
Briefing the media persons about deliberations at the two-day meeting of the GST Council here in Chandigarh, the Union Finance Minister said that the Finance and other Ministers of 16 States spoke on the compensation issue. Of the 16 States, 3-4 spoke of evolving their own revenue stream to break from the compensation mechanism, she said.
The Centre did not reveal its mind on the issue. When a nationwide GST subsumed 17 Central and State levies from July 1, 2017, it was decided that States will be compensated for any loss of revenue from the new tax for five years. That five-year term is ending on June 30. With two years being lost in the pandemic, States have sought an extension of this compensation mechanism.
Sitharaman said that the GST Council deferred a decision on levying a 28 per cent tax on casinos, online gaming, horse racing and lottery pending more consultations with stakeholders. A Group of Ministers headed by Meghalaya Chief Minister Conrad Sangma has been asked to consider submissions of stakeholders again on the valuation mechanism and submit its report by July 15, she said.
