In what the government on Wednesday called a Diwali gift, the GST Council has approved sweeping rate cuts across key sectors. Finance minister
Nirmala Sitharaman announced that daily-use items like hair oil, shampoo, toothpaste, soap, toothbrushes, and shaving cream will now attract just 5% GST, down from 18%. GST on individual health and life insurance has been scrapped entirely. Farmers benefit too, with tractor tyres, parts, and tractors now taxed at only 5%.
Also read: GST rate cuts bonanza! What is cheaper and dearer? Check full list Rate change FAQs
When will the changes in GST rates come into force?The changes in GST rates on services and goods other than cigarettes, chewing tobacco products, unmanufactured tobacco and beedi will be effective from Sept 22.
General slashing of tax across categories
Will e-way bills have to be cancelled and generated afresh on goods in transit when new rates take effect?E-way bills currently in transit will continue to remain valid as per their original validity period.
What is the reason for the 40% rate on 'other non-alcoholic beverages'?Principle behind the recent rate rationalisation is to keep similar goods at the same rate to avoid issues of misclassification and disputes.
What is the reason for revising the GST rate only on specified varieties of Indian bread?Bread was already exempt while pizza bread, roti, porotta, paratha attracted different rates. All Indian breads have been exempted even though only a few goods have been mentioned as examples.
Why has rate of carbonated beverages of fruit drink or carbonated beverages with fruit juice increased?These goods attracted compensation cess in addition to GST. Since it has been decided to end compensation cess levy, the tax has been increased to maintain pre rate rationalisation level of tax.
Why is there a different tax treatment between paneer and other cheese?Prior to rate rationalisation, paneer sold in other than pre-packaged and labelled form already attracted nil rate. The changes have been made only for paneer supplied in pre-packaged and labelled form. Paneer is an Indian cottage cheese. This is mostly produced in the small scale sector. The measure is intended to promote Indian cottage cheese.
What will be rate of GST on services of admission to sporting events other than sporting events like IPL?Admission to other sporting events, including recognised sporting events, where the ticket price is not more than Rs 500 continues to be exempt, and if the ticket price is more than Rs 500, it continues to be taxed at the standard rate of 18%.