Panaji: The Goods and Services Tax (GST) council on Friday during its first meeting in the state and its 37th meeting so far, announced rate cuts on various items effective from October 1. The key sectors which benefit from the rate cuts are hotels, gems and jewellery, defence and automobiles.
The council has cut tax rate on hotel room tariffs, a move aimed at giving a boost to the hospitality sector. The tax rate on hotel rooms with tariffs of up to Rs 7,500 per night has been cut to 12 per cent from the existing 18 per cent, said the Finance Minister, soon after the meeting.
Similarly, the tax on room tariff of above Rs 7,500 has been slashed to 18 per cent from the existing 28 per cent. There will be no GST on room tariffs of below Rs 1,000 per night.
There have been demands pouring in from various sectors ranging from biscuits to automobiles and FMCG to hotels for reduction in tax rates in the wake of economic slowdown. To the automobile industry seeking lower taxes, the council approved lower 12 per cent cess on 1,500 cc diesel, 1,200 cc petrol vehicles with capacity to carry up to 13 people.
The Council also exempted imported defence goods that are not manufactured indigenously from GST and IGST. Goods for sports, specifically FIFA and under-17 Women’s World Cup are also exempted.
The Council recommended rate cuts for several items including slide fasteners (zips), wet grinders, dried tamarind, cups and plates made from leaf and biodegradable material, marine fuel and fish meal.
On the other hand, GST rate increases are announced for railway wagons from five per cent to 12 per cent and caffeinated drinks from 18 per cent to 28 per cent. Aerated drink manufacturers are no longer eligible to come under the compensation scheme.
The GST Council also decided to impose a uniform tax rate of 12 per cent on plastic polypropylene and polyethylene bags used for packaging. Earlier, the bags were levied GST in slabs in the range of 5 per cent-12 per cent and 18 per cent.