The GST Council in its 47th meeting had unanimously decided to go for a rate hike on several daily essential items. The GST rates hike on these items has been implemented from Monday, July 18, 2022 after which the common man may have to pay extra to buy day to day items. Government has notified them via notifications and also released FAQs and clarification regarding to these changes.
1. GTA Transactions under GST
Services by Goods Transport Agency provided to Registered Persons shall now be completely taxable and GTA has an option to pay Tax under Forward Charges i.e. 5% without ITC or 12% with ITC. Therefore, now all the freight charges will be taxable under RCM or forward charge basis as per the option availed by GTA.
| Particulars | Earlier | With effect From 18th July 2022 |
| Consignment upto Rs 750 & Total carriage value upto Rs 1500 | Exempt | Taxable |
Read Also: GST on Freight Charges|GST on Transportation of Goods-Road, Rail, GTA
2. Residential Dwelling let out to Registered Person
GST shall be payable under reverse charge when a residential dwelling is taken on rent by registered person if owner is unregistered. Renting an immovable property is considered a supply of service and it attracts GST @ 18% (SAC Code – 9963/9972). GST was not applicable/exempted if the residential property was rented out to any person (whether a registered or unregistered person under GST) up to 17th July 2022.
3. GST on ICU beds
Services provided by a clinical establishment by way of providing room [other than Intensive Care Unit (ICU)/Critical Care Unit (CCU)/Intensive Cardiac Care Unit (ICCU)/Neo natal Intensive Care Unit (NICU)] having room charges exceeding Rs. 5000 per day to a person receiving health care services will be taxable under Heading 9993 at the rate of 5% without ITC.
4. Hotel accommodation below Rs 1,000/-
Exemption on services by Hotel Inn guest house Club of composite by whatever name called for residential or lodging purpose having value of supply of unit accommodation below or equal to 1000 rupees per day or equivalent is withdrawn. Therefore, w.e.f. 18.07.2022
| Particulars | Earlier | With effect From 18th July 2022 |
| Hotel accommodation priced up to Rs 1000/day | Exempt | Taxable at 12%. |
Read Also: GST interest to be charged for wrongful ITC availment
5. GST on Pre packed and labeled items
Earlier, there was exemption from GST on Unbranded or Branded Commodities where right on the brand has been foregone which has been done away w.e.f July 18, 2022, and now GST exempted only when it is not a pre-package and labelled commodities.
Now, GST leviable on pre-package and labelled commodities, on which declaration is required under Legal Metrology Act, 2009 and rules made there under and the concept of branded or unbranded has been done away with. However, if such specified commodities are supplied in a package that do not require declaration(s)/ compliance(s) under the Legal Metrology Act, 2009, and the rules made thereunder, the same would not be treated as pre-packaged and labelled for the purposes of GST levy.
For example, items like pulses, cereals like rice, wheat, and flour (aata), etc., earlier attracted GST at the rate of 5% when branded and packed in unit container. W.e.f. July 18, 2022, these items would attract GST when “pre-packaged and labelled”. Additionally, certain other items such as Curd, Lassi, puffed rice etc., when “pre-packaged and labelled” would attract GST Rates @ 5% with effect from July 18, 2022.
Read FAQs on GST applicability on ‘pre-packaged and labelled’ goods
6. Changes in GST Rates of Goods:
| Particulars | Before Change | After Change |
| Printing, writing, or drawing ink | 12% | 18% |
| Power-driven pumps are primarily designed for handling water. For example, centrifugal pumps, deep tube-well turbine pumps, submersible pumps, and bicycle pumps | 12% | 18% |
| LED lamps, lights, and fixtures, and their metal printed circuits board, Knivess with cutting blades, paper knives, forks, pencil sharpeners, spoon | 12% | 18% |
| Drawing and marking out instruments | 12% | 18% |
| Solar water heater and system | 5% | 12% |
| Prepared/finished leather, chamois leather, composition leather | 5% | 12% |
| Orthopedic appliances − splints and other fracture appliances, artificial parts of the body, or other appliances that are worn or carried, or implanted in the body to compensate for a defect or disability, intraocular lens | 12% | 5% |
| Ostomy appliances | 12% | 5% |
| Tetra packs (aseptic packaging paper) | 12% | 18% |
| Cut and polished diamonds | 0.25% | 1.5% |
| IGST on specified defense items imported by private entities or vendors, when the end-user is the defense forces of India | Applicable rate | NIL |
| Cheques, lose or in book form | NIL | 18% |
| Parts of balloon and dirigibles, gliders and other non-powered aircraft | NIL | 18% |
| The rate on machines for cleaning, sorting or grading seed, and grain pulses, machinery used in milling industry or for the working of cereals etc, ‘pawan chakki’, or air-based atta chakki, wet grinder. | 5% | 18% |
| Machines for cleaning, sorting or grading eggs, fruit or other agricultural produce and its parts, milking machines and dairy machinery | 12% | 18% |
| Petroleum/coal bed methane | 5% | 12% |
| E-waste | 5% | 18% |
| Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans, and globes | NIL | 12% |
7. Changes in GST Rates of Services:
| Particulars | Before Change | After Change |
| Services supplied by the foreman to chit fund | 12% | 18% |
| Job work in relation to the processing of hides, skins, and leather | 5% | 12% |
| Job work in relation to the manufacture of leather goods and footwear | 5% | 12% |
| Job work in relation to the manufacture of clay bricks | 5% | 12% |
| Works contract for roads, bridges, railways, metro, effluent treatment plant, etc. | 12% | 18% |
| Works contract service supplied to Central and State governments, local authorities for historical monuments, canals, dams, pipelines, plants for water supply, educational institutions, hospitals, etc. and its sub-contracting | 12% | 18% |
| Works contract service supplied to Central and State governments and local authorities involving predominantly earthwork and its sub-contracting | 5% | 12% |
| Transport of goods and passengers by ropeways | 18% | 5% (with ITC for services) |
| Renting of truck/ goods carriage where the cost of fuel is included | 18% | 12% |
| Transportation by rail or a vessel of railway equipment and material | NA | 5/12% |
| storage or warehousing of commodities which attract tax (nuts, spices, copra, jaggery, cotton etc.), | NA | 18% |
| fumigation in a warehouse of agricultural produce, and. | NA | 18% |
| Services by the RBI, the IRDA, the SEBI, and the FSSAI, GSTN, | NA | 18% |
Note: The new GST rates for the relevant goods and services will be made effective from July 18, 2022.
8. 18% GST on SEBI Fees
Market infrastructure institutions, including stock exchanges, and persons dealing in the securities market will need to pay a GST of 18 per cent on the fees charged by the regulator SEBI. The circular of SEBI informed “All the market infrastructure institutions, companies who have listed/are intending to list their securities, other intermediaries and persons who are dealing in the securities market are hereby informed that the fees and other charges payable to Sebi shall be subject to GST (Goods and Services Tax) at the rate of 18 per cent with effect from July 18, 2022”
9. Fly ash bricks to attract same concessional rate irrespective of fly ash content
Earlier, the CBIC issued Notifications for
- compulsory registration a person engaged in supply of fly ash bricks etc. irrespective of the threshold limit
- manufacturer of fly ash bricks etc. not eligible for composition scheme
- concessional rate on supply of fly ash bricks etc
CBIC has now issued amendments in its Earlier Notifications, so as to simplify the measure and done away with the condition of 90% fly ash content w.r.t. fly ash bricks w.e.f. July 18, 2022
10. Concessional GST rates of 5% on supply of scientific and technical equipments rescinded
CBIC vide Notification No. 11/2022-Central Tax (Rate) dated July 13, 2022 has rescinded NN. 45/CT(R) (that provide concessional GST rates of 2.5% on scientific and technical equipments supplied to public funded research institutions, departments and laboratories of the central government and state government, cancer institute and research institution, other than a hospital) to change the concessional GST rate of 5% (2.5% each CGST and SGST or 5% IGST) on scientific and technical equipments to rate applicable on such scientific and technical equipments w.e.f. July 18, 2022
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