GST Rates Changed for Some Products and Services

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Finance Minister’s Pre-Budget Meeting

In a pre-budget meeting, Finance Minister Nirmala Sitharaman emphasized the Centre’s support to states through timely tax devolution and GST compensation arrears to boost economic growth. She consulted with finance ministers from states and Union Territories to gather their views.

Key Changes in GST Rates

The 53rd meeting of the GST (Goods and Services Tax) Council, introduced several changes to GST rates for certain products and services.

Hostel Accommodation Exemption

Services for hostel accommodation outside educational institutions are now exempt from GST, provided the charges do not exceed ₹20,000 per person per month. However, the student must have stayed in the hostel for a continuous period of 90 days. This condition is set to prevent hotels from misusing the exemption.

Railway Services Exempted

The purchase of railway tickets and payments for waiting room and cloakroom charges are now exempt from GST. Additionally, services like battery-operated vehicles and intra-railway services will not attract GST.

Uniform GST Rate on Milk Cans

The GST Council recommended a uniform rate of 12% on milk cans, simplifying the tax structure for this essential item.

Interest Waiver on Penalties

The council also recommended waiving interest on penalties for tax demand notices, providing relief to taxpayers.

Centre’s Support to States

During the pre-Budget meeting, Ms Sitharaman reiterated the Centre’s commitment to supporting states through timely tax devolution and clearing GST compensation arrears. She encouraged states to take advantage of the scheme offering a 50-year interest-free loan from the Centre for undertaking specified reforms.

These changes aim to simplify the GST structure and provide relief to taxpayers while supporting the growth and development of states across the country.

-Prisha Jaiswal

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