Published on: June 30, 2022 at 18:07 IST
On June 29, the Finance Ministry announced that the government would increase the taxes on a number of goods and services, including kitchenware, from the current 12% to 18%.
The decision was taken following the two-day 47th GST Council Meeting, and it will become effective on July 18, 2022. Kitchen utensils, led lights, farm equipment, solar water systems, work contracts for roads, irrigation projects, hospitals, and educational institutions, among other services, will now be charged at 18% instead of the previous rate of 12%, according to the statement.
Nirmala Sitharaman, the Finance Minister, announced the decision to rationalise an inverted duty structure by the Goods and Services Tax Council in Chandigarh.
In addition to raising rates for packaged food items, the GST Council also approved increasing the tax on petroleum and coal bed methane from 5% to 12%. While the GST on e-waster was revised from the previous 5% to 18%.
Cheques, whether lose or in book form, as well as parts of goods of heading 8801, will be 18% tax imposed by the government. However, all printed atlases, wall maps, topographical plans, and globes as well as hydrographic or similar charts will invite a 12 percent GST. All of these items were previously charged nothing.
Following FM Sitharaman’s announcements, analysts said that increasing taxes would place an additional burden on households already dealing with a surge in the cost of food and energy.
According to Tax Connect Advisory Vivek Jalan, the tax on agricultural items including packaged cereals, wheat, maize, and rice that are sold in labelled packages but are unbranded may increase by 5%.
As a result of the GST rate rises, “Edible oils as well as milk products are likely to become more expensive,” he stated.
After reaching an eight-year high of 7.79% in April, consumer price index-based inflation increased by 7.04% in May, but it continued to be above the central bank’s tolerance band of 6% for the fifth consecutive month.