FM Nirmala Sitharaman cuts GST on hotels, but makes caffeinated drinks costlier

File image

Finance Minister Nirmala Sitharaman on September 20 announced several revisions to the goods and services tax (GST) rates following the 37th GST Council meeting.

Several decisions taken were aimed at promoting tourism. The Council approved a cut in tax rates on rooms with a tariff of Rs 7,500 and above to 18 percent and those with tariff below Rs 7,500 to 12 percent. GST on room tariff below Rs 1,000 has been scrapped.

GST rate on railway wagons and coaches was increased to 12 percent from the existing 5 percent while that on caffeinated drinks was raised to 28 percent from 18 percent, with an additional 12 percent GST compensation cess.

Sitharaman, however, made no mention of any rate cuts in the auto sector except a GST cess on 10-13 seater passenger vehicles (PVs) that has been cut to 1-3 percent.

Exemptions from GST and IGST have been provided on imports of specified defence goods up to 2024.

Supply of goods and services to FIFA and for goods and services to hold under-17 Women's Football World Cup In India will also be exempted from GST.

The Council has also approved rate reductions on cut and polished semi-precious stones. GST on dried tamarind has been removed.