Latest Changes in Tax Rates for Goods and Services

In the latest GST Council meeting, several important decisions were made regarding the tax rates for various goods and services. These changes are aimed at simplifying the tax structure, addressing anomalies, and boosting different sectors of the economy. Here’s a detailed look at what gets cheaper and what gets costlier following the new tax rate adjustments.

Goods and Services Getting Cheaper

1. Electric Vehicles (EVs)

2. The GST rate on electric vehicles has been reduced from 12% to 5%. This move is expected to make EVs more affordable, encouraging their adoption and promoting a cleaner environment.

3. Affordable Housing

4. The GST on affordable housing projects has been cut to 1%, down from 8%. This reduction is aimed at making housing more accessible and affordable for the lower and middle-income groups.

5. Hotel Accommodation

6. For hotel rooms with tariffs between ₹1,001 to ₹7,500, the GST rate has been reduced to 12%, and for rooms with tariffs above ₹7,500, the rate is now 18%. This reduction aims to boost the tourism and hospitality sector.

7. Cinema Tickets

8. The GST on cinema tickets priced up to ₹100 has been reduced to 12%, and for tickets above ₹100, the rate has been cut to 18%. This reduction is expected to make movie-going more affordable and increase footfall in cinemas.

Goods and Services Getting Costlier

1. Caffeinated Beverages

2. The GST on caffeinated beverages has been increased to 28%, along with an additional compensation cess of 12%. This hike is likely to discourage the consumption of such beverages, promoting healthier alternatives.

3. Marble Slabs

4. The GST rate on marble slabs has been increased from 5% to 18%. This increase is expected to bring uniformity in the taxation of marble and granite slabs.

5. Railway Wagons, Coaches

6. The GST on railway wagons, coaches, and their parts has been increased to 12% from the previous 5%. This adjustment aims to address the inverted duty structure in the railway sector.

Table of Products with GST Rate Changes

Rationale Behind the Changes

The GST Council periodically reviews and revises tax rates to streamline the tax structure, address industry concerns, and boost economic growth. The recent changes reflect the Council’s efforts to:

• Encourage Eco-friendly Alternatives: By reducing the GST on electric vehicles, the government aims to promote cleaner transportation options.
• Boost Affordable Housing: Lowering the GST on affordable housing projects is a step towards making housing more accessible for the masses.
• Support the Tourism and Entertainment Industry: The reduction in GST for hotel accommodation and cinema tickets is expected to revitalize these sectors, which have been hit hard by the pandemic.
• Discourage Unhealthy Consumption: The increased GST on caffeinated beverages is likely a move to promote healthier lifestyle choices among consumers.
• Correct Tax Anomalies: Adjusting the GST on marble slabs and railway wagons helps in correcting the inverted duty structure and ensuring uniformity.

Conclusion

The latest GST rate changes reflect the government’s intent to balance economic growth with public welfare. By making essential services and eco-friendly alternatives cheaper while discouraging unhealthy consumption, the Council aims to create a more balanced and progressive tax system. Businesses and consumers alike need to stay informed about these changes to make the most of the revised tax structure.

For a detailed list of all the revised GST rates, you can refer to the official GST Council announcements or visit their website.

Tags: GST rate changes, GST Council meeting, tax rate updates, affordable housing GST, electric vehicles GST, hotel accommodation GST, cinema tickets GST, caffeinated beverages GST, marble slabs GST, railway wagons GST, GST India 2024