Keeping up with GST changes is crucial for businesses and consumers alike. Recent updates have brought clarity and revised rates on several common goods and services. A common question is: do all changes fall under 5% or 18%? The answer is no—the updates span various rates to address specific sector needs.
Here’s a quick, point-by-point breakdown of the most important changes.
1. Food Delivery Gets a Clear, Uniform Tax
The Headline:
Uniform 5% GST rate on all restaurant food deliveries.
- What Changed? The tax ambiguity is over. Whether you order directly from a restaurant or through an app like Swiggy or Zomato, the GST rate is now standardised at 5%.
Who It Affects:
Consumers will see consistent pricing. Restaurants and aggregators benefit from simplified compliance.
2. A Move on Domestic Fuel
The Headline:
LPG brought under the GST ambit.
- What Changed? Liquefied Petroleum Gas (LPG) supplied in domestic cylinders has been formally incorporated into the GST system.
Who It Affects:
This is a significant structural step for household essentials, potentially influencing future pricing.
3. Support for Agriculture and Infrastructure
The Headline:
Lower rates on farm equipment parts and railway concessions.
- What Changed? Certain parts for agricultural machinery (e.g., tractors) saw rates reduced to 12% or 18%. Specific goods and services for railway projects have been exempted or placed in lower tax slabs.
Who It Affects:
Farmers benefit from lower costs. The railway sector gains from reduced project expenses, boosting infrastructure development.
4. Relief on Affordable Rentals
The Headline:
GST exemption on hostel accommodation.
- What Changed? Rental services provided by hostels and PG accommodations outside educational institutions, below a certain monthly value, are now fully exempt from GST.
Who It Affects:
Major relief for students and working professionals seeking affordable lodging.
5. Cheaper Packaging for Businesses
The Headline:
Reduced rate on carton boxes.- What Changed? The GST rate on carton boxes has been lowered.
Who It Affects:
A wide range of industries, especially e-commerce, FMCG, and logistics, will see reduced packaging costs.
Clarification on GST for Hotel Rooms & Key Takeaways
GST Rates for Hotel Rooms
The GST rate applicable to hotel accommodations is not a single rate but is based on the daily tariff per room:
- Tariff below ₹1,000 per day: GST is exempt (0%)
- Tariff between ₹1,001 and ₹7,500 per day: GST is levied at 12%
- Tariff above ₹7,500 per day: GST is levied at 18%
Conclusion:
Not Just 5% or 18%: The new changes use many different tax rates (0%, 5%, 12%, 18%) based on what makes sense for each product or service.
Goal is Clarity: The main aim was to remove confusion. Clear rules mean businesses can follow them easily and there are fewer disputes.
Focused Help: The government is using GST to help specific groups like farmers, students, and factories by making things cheaper for them.
Always Check: GST rules update frequently. It is important for businesses to always check the latest official rules or ask an expert to avoid errors.