The Group of Ministers (GoM) on Rate Rationalisation is expected to submit an interim report to the Goods and Services Tax (GST) Council at its June meeting, sources told CNBC-TV18 on Tuesday.
The interim report is expected to state that "any decision made by the GST Council must take public perception into account". This will necessitate careful consideration, with sensitive items kept in mind, sources in the know told CNBC-TV18.
“Exemptions will be given after serious thoughts and their review would require careful consideration,” a government official said.
Exemptions on sensitive items such as hearing aids, educational institutions, bread, incense sticks, utensils, tractors, and agri-related machinery should be maintained, the official added.
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The report is likely to suggest inverted duty correction. However, input tax credit refund on account of inverted rates could be disallowed for edible oils, as per the official.
Inverted duty correction on printing, writing, and drawing ink, with a range of 12 to 18 percent, will most likely be recommended in the report. Inverted duty structure on LED lights, fixtures, and lamps will also be adjusted from 12 to 18 percent.
A correction of 5 to 12 percent could be proposed for the solar water heaters and systems, as well as for finished leather and composition leather and on the works contract provided to the government.
The inverted duty on tailoring and other textile job works will be increased from 5 percent to 12 percent, the source suggested.
As per the sources, the GST exemption on packaged curd, lassi, butter milk, puffed rice, flattened rice, parched rice, pappad, paneer, honey, foodgrain, cereals, jaggery, and certain vegetables is being phased out by the GoM.
The GoM is likely to propose that GST exemptions be reviewed and that commodities be re-fitted based on more appropriate rates, such as:
Other exemptions recommended for withdrawal include
Hotel accommodation costing less than Rs 1,000 per unit per day will be taxed at the same rate as the rest of the industry — 12 percent. Hospital rooms, except ICU, with daily rent of Rs 5,000 could be taxed at 5 percent without input tax credit.
Additionally, the exemption for cord blood banks will be revoked. If the daily rent is more than Rs 5,000 per day, and if the monthly rent more than Rs 2,500, religious places intended for the general public can be rented, sources said.
(Edited by : Anand Singha)
First Published: Jun 21, 2022 9:11 PM IST
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