The GST Council approved the Group of Ministers' (GoM) proposals in principle on Tuesday, clearing the way for the elimination of specific exemptions on goods and services as well as the rectification of inverted duty structures (IDS) on commodities like knives, ink, completed leather, etc.
Food goods like meat, fish, curd, paneer, and honey that are pre-packaged and labelled will now be subject to GST, a tax that will also be applied to the cost that banks charge for issuing checks. This comes after the GST Council, the highest decision-making body for the goods and services tax, accepting the majority of a group of state ministers' proposals on withdrawing exemptions with a view to rationalising the charge, according to authorities.
On the first day of the two-day meeting, the panel, which was chaired by Union Finance Minister Nirmala Sitharaman and included officials from all states and UTs, accepted the GoM's request to reconsider the GST exemption that now applies to packaged and labelled food items. Therefore, all goods, including pre-packaged and labelled meat, (except frozen), fish, curd, paneer, honey, dried leguminous vegetables, dried makhana, wheat and other cereals, wheat or meslin flour, jaggery, and puffed rice (muri), will no longer be exempt from GST and will instead be subject to a 5% tax.
Similarly, banks' charges for issuing checks will now be subject to an 18% GST (loose or in book form). Atlases and other maps and charts will be subject to a 12% charge. Unpackaged, unlabeled, and unbranded goods will continue to be exempt from the GST. In addition, instead of the current tax exemption, hotel rooms costing less than Rs 1,000 per day will be subject to a tax of 12%. Rationalizing the GST rate is crucial to raising the weighted average GST rate, which has dropped to 11.6% from 14.4% at the time of launch.