New GST Comes to Rescue: Eating Out Becomes Affordable!

New GST

From today, the revised GST rates will come into action making a long list of daily utility items cheaper and affordable. Last week in its 23rd meeting, the GST Council approved the biggest change in the new tax regime that came into effect from July 1, 2017.

Under the current changes, 178 everyday items will get taxed at the lower rate of 18% from 28%. After this change, only 50 items will remain in the highest tax bracket of 28% which includes mainly white goods such as washing machines and refrigerators, and “sin” items such as tobacco.

Many FMCG items like condensed milk, refined sugar/sugar cubes and pasta, which were earlier taxed at 18% will come under the lower slab of 12%. Tax rates on some other items will fall from 18% to 5 percent and from 5 percent to nil.

Many companies have said that they will pass on the GST rate cut benefits to consumers but there will be a transition time before new price stocks are available in the market.

A note-worthy tax change has occurred in restaurants, the GST Council lowered the tax rate of restaurants to a uniform 5 percent from 12% on non-AC restaurants and 18% on air-conditioned ones, a move that will bring down the cost of eating out.

In this case, restaurants will not be entitled to the benefit of input tax credit (ITC). Restaurants in hotels that charge a room tariff of Rs. 7,500 or more per day will be levied the GST rate of 18% but input tax credit is allowed for them.

Goods on which the GST Council has recommended a reduction in the rate from 28% to 18% include:

A. Wire, cables, insulated conductors, electrical insulators, electrical plugs, switches, sockets, fuses, relays, electrical connectors, Electrical boards, panels, consoles, cabinets etc for electric control or distribution

B. Particle/fibre boards and plywood. The articles of wood, wooden frame, paving block, Furniture, mattress, bedding and similar furnishing

C. Trunk, suitcase, vanity cases, briefcases, travelling bags and other handbags, cases

D. Detergents, washing and cleaning preparations, Liquid or cream for washing the skin, Shampoos; Hair cream, Hair dyes (natural, herbal or synthetic) and similar other goods; henna powder or paste, not mixed with any other ingredient, Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, perfumery, cosmetic or toilet preparations, room deodorizers, Perfumes and toilet waters, Beauty or make-up preparations, Fans, pumps, compressors, Lamp and light fitting

E. Primary cell and primary batteries, Sanitary ware and parts thereof of all kind, Articles of plastic, floor covering, baths, shower, sinks, washbasins, seats, sanitary ware of plastic, Slabs of marbles and granite, Goods of marble and granite such as tiles, Ceramic tiles of all kinds

F. Miscellaneous articles such as vacuum flasks, lighters, Wristwatches, clocks, watch movement, watch cases, straps, parts

G. Article of apparel & clothing accessories of leather, guts, furskin, artificial fur and other articles such as saddlery and harness for any animal, Cutlery, stoves, cookers and similar non-electric domestic appliances, Razor and razor blades, Multi-functional printers, cartridges, Office or desk equipment, Door, windows and frames of aluminium

H. Articles of plaster such as board, sheet, Articles of cement or concrete or stone and artificial stone, Articles of asphalt or slate, Articles of mica, Ceramic flooring blocks, pipes, conduit, pipe fitting, Wallpaper and wall covering, Glass of all kinds and articles thereof such as mirror, safety glass, sheets, glassware, Electrical, electronic weighing machinery

I. Fire extinguishers and fire extinguishing charge, Forklifts, lifting and handling equipment, Bulldozers, excavators, loaders, road rollers, Earthmoving and levelling machinery, Escalators, Cooling towers, pressure vessels, reactors, Crankshaft for sewing machine, tailor’s dummies, bearing housings, gears and gearing; ball or roller screws; gaskets

J. Electrical apparatus for radio and television broadcasting, Sound recording or reproducing apparatus, Signalling, safety or traffic control equipment for transports, Physical exercise equipment, festival and carnival equipment, swings, shooting galleries, gymnastic and athletic equipment

K. All musical instruments and their parts, Artificial flowers and fruits, Explosive, anti-knocking preparation, fireworks

L. Cocoa butter, fat, oil powder, Extract, essence and concentrates of coffee, miscellaneous food preparations, Chocolates, Chewing gum/bubble gum, Malt extract and food preparations of flour, groats, meal, starch or malt extract, Waffles and wafers coated with chocolate or containing chocolate

M. Rubber tubes and miscellaneous articles of rubber, Goggles, binoculars, telescope, Cinematographic cameras and projectors, image projector, Microscope, specified laboratory equipment, specified scientific equipment such as for meteorology, hydrology, oceanography, geology, Solvent, thinners, hydraulic fluids, anti-freezing preparation

28% to 12% – Wet grinders consisting of stone as a grinder, tanks and other armoured fighting vehicles.

18% to 12% – Condensed milk, Refined sugar and sugar cubes, Pasta, Curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasoning, Diabetic food, Medicinal grade oxygen, Printing ink, Handbags and shopping bags of jute and cotton, Hats (knitted or crocheted), Parts of specified agricultural, horticultural, forestry, harvesting or threshing machinery, Specified parts of sewing machine, Spectacles frames, Furniture wholly made of bamboo or cane.

18% to 5% – Puffed rice chikki, peanut chikki, sesame chikki, revdi, tilrevdi, khaza, kazuali, groundnut sweets gatta, kuliya, Flour of potatoes put up in unit container bearing a brand name, Chutney powder, Fly ash, Fly ash aggregate with 90% or more fly ash content. Sulphur recovered in the refining of crude.

12% to 5% – Desiccated coconut, Narrow woven fabric including cotton newar [with no refund of unutilised input tax credit, Idli, dosa batter, Finished leather, chamois and composition leather, jute twine, coir products, coir cordage and ropes, fishing net and fishing hooks, worn clothing, fly ash brick.

5% to nil – Guar meal, Hop cone (other than grounded, powdered or in pellet form), Certain dried vegetables such as sweet potatoes, maniac, Unworked coconut shell, Fish frozen or dried (not put up in a unit container bearing a brand name), Khandsari sugar