5% GST on essential items: rice, wheat prices to go up from Monday

Thiruvananthapuram: The prices of essential items such as food grains and pulses are set to rise by 5 per cent from Monday due to the unexpected decision of the GST Council to hike tax rates. Even non-branded items such as flour and rice above 25 kg will attract a 5 per cent Goods and Service Tax if they are pre-packaged and labelled.  

Unbranded versions of grains and pulses which are sold in small quantities through retail shops are also set to become dearer as the ceiling of above 25 kg was dropped when the notification amending the GST provisions were issued on July 13.

Ironically, the tax to be charged for rice is going to be higher than the tax charged for unpacked chicken.

From Monday onwards, a five per cent GST will be charged for rice packets to be supplied to wholesale agents from mills. This will also push up rice price.

Pre-packed and pre-labelled curd, lassi and buttermilk are among the products that will attract a GST rate of 5 per cent from July 18. It might be recalled that these items were previously exempted from the ambit of GST. 

In the same way, pre-packed meat which is not frozen, fish, honey, jaggery, "papad" and packed wheat powder will also invite a GST rate of five percent.

The decision regarding 5 per cent GST was taken by the GST Council, a joint forum of the Centre and the States, at a meeting held on June 28 and June 29. States like Kerala are keeping mum on this unilateral decision by the GST Council.

Earlier, only products like branded rice were slapped with tax. When the GST was introduced in the country five years ago, essential items such as rice, vegetables, egg, and fish were excluded from the GST regime.

Items to go costly

• From next week, 18 per cent GST will be imposed on the fee charged by banks for the issue of cheques (loose or in book form).
• Hospital room rents (excluding ICU) exceeding Rs 5,000 per day per patient will be taxed.
• Maps and charts will be charged with a GST of 12 per cent.
• The GST for solar water heaters will jump from 5 to 12 per cent. 
• The GST for cut and polished diamonds will go up from 0.25 to 1.25 per cent.
• A hotel room having rent less than Rs1,000 will have 12 per cent GST.
• There will be GST for houses being given on rent for business purposes.
• Now onwards, tax exemption for availing air travel to North-Eastern States will be restricted to economy class alone.
• Items whose GST will shoot up from 12 per cent to 18 per cent are LED lights, fixtures, LED lamps,  knives with cutting blades, paper knives, pencil sharpeners and blades, spoons, forks, ladles, skimmers and cake-servers.

Items to be cheaper 

• The committee lowered the GST rate from 12 per cent to 5 per cent for artificial limbs, orthopaedic implants and several kinds of orthoses such as splints, braces, belts and calipers.
• The transport services of goods and passengers through ropeways will get cheaper as the GST rates have been slashed from 18 per cent to 5 per cent.
• The renting of goods carriage with operators will now attract only 12 per cent GST from the earlier 18 per cent.
• GST exemption for individuals in running arts and cultural training programmes would continue.