GST: Revised rates come into effect from today; Here's what gets expensive, what’s cheaper  

The revised goods and services tax (GST) rates have come into effect from today. After the recent revisions, customers will have to pay GST on pre-packed and labeled food item, hospital rooms costing more than Rs 5,000. With this, packaged food items like curd, lassi, fish, meat, paneer and buttermilk are likely to get costlier.  

Besides this, bank cheque book issuance, hotel rooms under Rs 1,000 per day, non-ICU hospital beds over Rs 5,000 per day, solar water heaters, LED lights, lamps, knives, pumps, drawing and marking instruments and work contracts for roads and bridges will also get costlier.  

But how does the government define pre-packaged and labeled food items? According to the Finance Ministry’s FAQ regarding revised GST slabs, “’Pre-packaged commodity’ means a commodity which without the purchaser being present is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a pre-determined quantity.” 

The Central Board of Indirect Taxes and Customs (CBIC) explained, “It is clarified that a single package of these items (cereals, pulses, flour, etc.) containing a quantity of more than 25 kg or 25 litre would not fall in the category of pre-packaged and labeled commodity for the purposes of GST and would therefore not attract GST.” 

The CBIC explained that GST will apply on a package that contains multiple retail packages. Moreover, goods and services like ropeway rides, electric vehicles, goods carriage rent on renting of goods carriage and select orthopaedic services. GST rates on electric vehicles as well as the rates on artificial parts of the body, splints and other fracture appliances have been slashed from 12 per cent to 5 per cent.  

Here’s how the country reacted to hike in GST rates

Reacting to the hike in GST on a host of goods and services, BJP MP Varun Gandhi tweeted in Hindi, “From today GST is applicable on packaged products like milk, curd, butter, rice, pulses, bread. This decision, taken amid record-breaking unemployment, will further lighten the pockets of middle-class families and especially the struggling youth living in rented houses. When it was time to give ‘relief’, we are ‘’hurting’.” 

CPI (M) Central Committee member Thomas Isaac also opposed the GST hike and tweeted, “The imposition of 5 per cent GST on items of common consumption like grains and curd that were so far exempted is regressive. Tax on packed grains below 75 kg will result in increase of prices of grains sold in retail. Withdraw tax on necessities and increase tax on luxuries.” 

The Indian Medical Association (IMA) has sought a rollback of the GST for healthcare services in a letter addressed to Union Finance Minister Nirmala Sitharaman. The IMA said, “If not possible, the input tax credit is a must to curtail the rise in healthcare costs. The application of GST is pushing healthcare towards a business model away from a service-centric one.” 

It added, “A steep rise of 12 per cent in biomedical waste is unjustified and it will raise the cost of running hospitals and clinics. It will further translate into raised charges for the patients. It is not reasonable to burden patients with more charges in these difficult times.” 

Meanwhile, traders’ body Confederation of All India Traders (CAIT) will launch a nationwide agitation on July 26 to seek the simplification of GST laws, as per a release. It added the agitation will begin from Bhopal and more than 50,000 trade organisations across the country will participate in the movement.  

National and state level organisations of transport, farmers, self-entrepreneurs, women entrepreneurs, small and medium manufacturers, consumers, etc. will also participate in the protests.  

GST Council chaired by Sitharaman and comprising of her state counterparts discussed the exemption list and imposed taxes on a host of goods and services last month. The council also removed duty inversion for goods where the taxes on inputs were higher than those on output by factoring in the interim report of the Group on Ministers (GoM) on rate rationalisation.  

(With inputs from Aishwarya Paliwal, agencies) 

Also read: Pay GST on pre-packed, labelled food, hospital rooms above Rs 5,000 from Monday

Also read: Highway developers seek review of GST hike on construction

Also read: GST on online gaming yet to be finalised; GoM to submit report in Aug