GST council announces many Changes in GST tax rates

The 50th GST Council Meeting concluded on Tuesday and witnessed significant recommendations regarding changes in GST tax rates, simplification of compliance processes, and measures to facilitate trade.

A 28% GST rate has been levied on the full value of gaming, horse racing, and casinos which comes as a drawback to online gaming companies. The tax on online gaming companies would be imposed without making any differentiation based on whether the games required skill or were based on chance.

Union finance minister Nirmala Sitharaman said the decision to levy maximum tax on online gaming and casinos were not intended to kill the industry but consider the “moral question” that it cannot be taxed at par with essential commodities.

The council exempted GST on key imports of pharma products like the cancer drug Dinutuximab, and Food for Special Medical Purposes (FSMP). IGST exemption will be extended to imported medicines and FSMP used in the treatment of rare diseases listed under the National Policy for Rare Diseases, subject to existing conditions. The exemption will also apply to FSMP imported by Centers of Excellence for Rare Diseases or recommended institutions.

Supply of raw cotton, including kala cotton, by agriculturists to cooperatives will be taxable under the reverse charge mechanism, and issues related to past periods will be regularized.

The other changes announced by the council on Tuesday were the reduction of tax on food and beverages sold at multiplexes, and tweaking the definition of utility vehicles for taxation. Food and beverages consumed in cinema halls will now attract a GST of 5 per cent, equivalent to the levy charged in hotels and restaurants, instead of 18 per cent which in many cases the cinema halls were charging.

The GST Council announced that the definition of an SUV will include only the length (4 meters and above), engine capacity (1,500 ccs and more), and ground clearance (unladen ground clearance of 170 mm and more).

Here are the major changes announced by the GST Council:

Exemption on Satellite Launch Services  now extended to private sector)