Several decisions have been taken in gst council meet in order to promote tourism,” Nirmala Sitharaman stated before announcing rate cuts on hotel bills

The GST Council meet on Friday anounced reduction in tax rates for the hotel industry, taking the entire sector out of the 28 per cent tax slab, the highest under the GST regime. The all-powerful panel also announced tax relief for outdoor catering, bringing down the GST rate for the service to 5 per cent from the earlier 18 per cent. There was no joy for the ailing automobile sector, though, which has been clamouring for a rate cut in face of its worst sales performance in the past two decades.

In a meeting chaired by Finance Minister Nirmala Sitharaman, the GST Council decided to increase taxes on caffeinated drinks – which includes cold drinks and energy drinks – to 28 per cent from 18 per cent. An additional cess of 12 per cent has been imposed on such beverages.

Addressing a press meet after the GST Council meet, FM Sitharaman said that the ministerial groups under the panel should meet more often for prompt resolution of rate issues.

GST Update

What Are The Benefits:

  1. Supply of goods and services to FIFA and other specified persons for U17 Women’s World Cup in India exempted from GST.
  2. Insurance provided to Central Armed Paramilitary Forces to be exempt from GST.
  3. Prospectively, warehousing of certain agricultural products has been exempted from GST.
  4. Hotels with room tariff of Rs 1000 or less will attract nil GST. Those with Rs 1,000- Rs 7,500 will attract 12 per cent GST. Hotels with a tariff of Rs 7,500 and above will be taxed at 18 per cent.
  5. Aerated drinks manufacturers no longer part of composition scheme, says the Finance minister.
  6. Composition cess on petrol vehicles with a capacity of 10-13 persons reduced to 1 per cent. The same for diesel vehicles with similar capacity will be 3 per cent.
  7. Uniform rate of 12 per cent for woven and non-woven polyethene bags.
  8. supply of silver, platinum from specified agencies to be exempt from GST, says the minister.
  9. Defence goods not being manufactured indigenously has been exempted from GST/IGST, announces Sitharaman.
  10. Marine fuel from 18% to 5%.

The GST Council has decided to increase the tax rate on caffeinated drinks. It increases GST rates on such beverages from 18 per cent to 28 per cent and imposes an additional cess of 12 per cent. The states have been seeking an extension of GST cess till 2022 in the face of dropping GST revenue collection in the wake of an economic slowdown.

The recommendations of the GST Council will be implemented from October 1, 2019.