Know the GST Rate Changes proposed by Fitment Committee in upcoming GST Council Meeting

As per news sources, the Nominated Fitment Committee has prescribed Rate Change on 14 Goods, Rejected rate change on 113 goods, and deferred rate change on 2 goods.

The Meeting will be held on 28-29 June 2022 (Tuesday and Wednesday) at Chandigarh.

The Fitment Committee has recommended a reduction in the GST rate on ostomy appliances to 5% from 12%. Further, it has been recommended to bring all kinds of Orthopaedic implants at par at 5% instead of differential rates of 5% & 12%.

A single rate of 5% has also been recommended on Napa stone/tiles without mirror polishing and thereby ending differential rates of 5% & 18%.

As a step of GST Rate Rationalization GoM Committee Suggested considering a single GST of 5% on all By-products of milling of Dal/Pulses, except Cat & Dog feed.

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Exempting BCD and IGST on certain defense imports by private entities provided that the end-user is Defence Forces is also in talk.

It was also suggested that Electric vehicles (EV) whether or not fitted with battery packs, should be taxed @ 5% GST.

Further, there is a proposal to reduce GST on medical devices, Branded (i.e., Packaged) Snack Foods such as chips, bhujia, namkeen etc from 12% to 5%, and hiking GST on Tetra Pack/ Tetra packaging paper from 12% to 18%. Additionally GST on Rooftop Solar Projects and DCR modules is proposed to be reduced from 12% to 5%.

GST Council is likely to issue a clarification on the refund of accumulated Input Tax Credit (ITC) to Duty-Free Shops in the upcoming GST Council Meeting.

Further Clarification is to be issued on sewage-treated water to attract “Nil” as against 18%. Also clarification on tax burden for Crypto ecosystem has been deferred by the GoM. Additionally no clarity is available on GST applicability on crypto exchanges and activities such as mining, barter, wallets etc.

Also, there is a proposal to reduce GST on the import of Gold Dore 3% to NIL on IGST and a proposal to reduce GST on Gems & Jewellery from 3% to 1.25% has been rejected.

Fitment Committee has rejected the proposal to reduce GST on ‘Carbonated Beverages of Fruit Drink’ or ‘Carbonated Beverages with Fruit Juice’ from 28%+ 12% Compensation cess to 12% and the proposal of waiver/reduction in GST rates for CNG buses and CNG kits from 28%.

The proposal to reduce GST on Helicopters, Aircraft Parts, Aviation Gasoline, and GST on Tobacco supplied for the manufacture of Smokeless Tobacco products, Beedis, and tobacco products has also been rejected.

The Nominated Fitment Committee recommended clarifying that IVF services are exempt under GST, it will be included under health care services. Further, the recommendation has been made for clarification on GST rates on 22 services.

GST Rate Reduction from 18% to 5% with ITC on ropeway services has been recommended on special request of State of Himachal Pradesh.

Most tour operators pay 5% GST without ITC. Operators have been arguing about the high effective GST tax rate on tour operators

It has been further requested that if tours are conducted for foreign tourists partially in India/partially abroad- allow the operator to pay GST on the amount for travel in India. Along with this, the fitment committee recommended a NEW MARGIN SCHEME for tour operators. Tour operators to pay GST on deemed value [certain % of gross tour cost] representing fair competitive margin, without ITC.

The proposal of restaurants to restore GST of 12% with ITC and reduction of GST on dry cleaning/laundry has been rejected. The Committee has rejected to revise rates on 102 Services.