GST rate cut on hotel room tariffs, relief for FIFA Women’s WC 2020

Central Goods and Services Tax, collection, budget estimate, GST, 40%, April, November, funds, revenue
The actual CGST collection during April-November stood at ₹3,28,365 crore while the budgeted estimate is of ₹5,26,000 crore for these months. Representational image: iStock

Amid demand for tax rate cuts in various sectors, the high-powered Goods and Services Tax (GST) Council on Friday (September 20) slashed the rates on hotel room tariffs while hiking the tax on caffeinated beverages.

After the 37th GST Council meeting in Goa on Friday, Finance Minister Nirmala Sitharaman told reporters that the GST on caffeinated beverages has been increased to 28% with an additional compensation cess of 12% as against the current 18%, reported news agency PTI.

The Finance Minister further announced that there will be no tax on hotel tariffs up to ₹1,000 per night, while those charging between ₹1,001 and ₹7,500 per night would be levied with 12% tax as against the existing 18%. An 18% GST will be applicable on room tariffs above ₹7,500 as against the current 28%, she added.

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On outdoor catering, she said the tax has been slashed to 5% from the existing 18% with input tax credit. The panel also proposed the exemption of FIFA under-17 Women’s World Cup, to be held in Odisha next year, from service tax, the report said.

Further, import of specified defence goods manufactured outside India has been exempted from the GST.

The PTI report further said that a uniform GST rate of 12% will be levied on woven/non-woven polyethylene bags while the rate on almond milk will be set at 18%.

The cess levied on petrol vehicles with the capacity to carry 10-13 persons has been reduced to 1% while the same for diesel vehicles has been slashed to 3%, the report added. This cess is applicable in addition to the maximum 28% GST on vehicles.

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Meanwhile, the tax on diamond job work has been reduced from 5% to 1.5% and the same on supply of machine job has been cut from 18% to 12%. Also, the GST on slide fasteners (zips) has been slashed to 12% from the earlier 18%, the report added. Besides, the tax on railway wagons and coaches has been hiked from 5% to 12%.

Also, there would be no GST on dried tamarind, and cups and plates made from flowers and leaves and barks of trees.

(With inputs from agencies)

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