New Delhi:
The Group of Ministers formed to correct the rates of Goods and Services Tax i.e. GST on Saturday decided to impose 18 percent GST on the margin value of old electric vehicles purchased for business use. The Council also agreed to keep aviation fuel (ATF) out of the GST regime. At the same time, the GST Council agreed to issue clarification regarding tax on popcorn. The council said pre-packaged and labeled ready-to-eat snacks will be taxed at 12 percent. GST Council said that if the snacks are caramelized, then 18 percent GST will be applicable on it. Let us tell you in detail what will be costlier and what will be cheaper after the implementation of the new rates.
What will be cheaper?
Fortified Rice Kernels That means FRK will become cheaper with the implementation of new rates. The council has decided to reduce GST on this by 5 percent.
Gene Therapy: The Council has kept gene therapy completely out of the purview of GST.
Food Preparation for Free Delivery: Concessional 5 percent GST rate has been applied on food inputs supplied under government programs for economically weaker sections.
System for Long Range Surface to Air Missile (LRSAM) Assembly: IGST is also exempted on systems, sub-systems and equipment used for LRSAM manufacturing.
Inspection tools for the IAEA: IGST exemption has been given on import of equipment and consumable samples for inspection by the International Atomic Energy Agency.
Black pepper and raisins (supplied by farmers): It has been clarified that GST is not liable on sales made directly by farmers.
Things that will become more expensive
Old and used vehicles (including EVs): GST on the sale of all old and used vehicles, except some petrol and diesel variants, has been increased from 12 percent to 18 percent.
Ready-to-Eat Popcorn: Pre-packed and labeled ready-to-eat snacks will attract 12 per cent tax, while caramelized ones will attract 18 per cent GST. Ready-to-eat popcorn, which is mixed with salt and spices, and has the essential quality of being salty, currently attracts 5 per cent GST if it is not pre-packed and labelled.
Autoclaved Aerated Concrete (ACC) Block: If fly ash content is more than 50 percent, 12 percent GST is applicable.
Sponsorship Services by Corporates: It has now been brought under the forward charge mechanism, which will potentially increase costs for sponsors.
other changes
Voucher: The GST Council has recommended no GST on voucher transactions as they are neither supply of goods nor supply of services.
Penal Charge: No GST is payable on penalty charged by banks and NBFCs for non-compliance of loan conditions.
The Council has recommended amending the definition of ‘pre-packaged and labelled’ to cover all goods which are meant for retail sale and do not exceed 25 kg or 25 litres, which are ‘pre-packed’ ‘ are as defined below. The Legal Metrology Act or the label affixed thereon is required to bear declarations under the provisions of the Act and Rules.
