Pre-packaged, labelled food items to be charged 5% GST

New Delhi: The first day of the 47th the Goods and Services Tax (GST) Council meeting held in New Delhi on Tuesday is said to have decided to bring pre-packaged and labelled food items under the ambit of the GST.

The Council is also known to have decided not to continue the exemption given to hotels that charge below Rs 1000 per day besides increasing the GST rate for manufacturing services of leather goods, clay bricks and host of items such as edible oils, coal, LED lamps, printing ink.

The first day of the GST Council has reportedly approved compliance measures for high-risk taxpayers including mandatory biometric authentication, inclusion of electricity bill data, real-time validation of all bank accounts against a particular PAN and geo-tagging.

The pre-packaged food items including puffed rice, wheat flour, curd, lassi will invite a tax rate of 5 per cent at par with the branded food items. At present, only branded and labelled packaged food items attracted a 5 per cent tax.

The Council is believed to have approved the recommendation of charging 12 per cent tax on hotel rooms costing less than Rs 1,000 per day. Currently, there is no tax for the rooms.

Manufacturing services of leather goods, clay bricks from 5 per cent to 12 per cent, and hiking GST on LED lamps, ink, knives, blades, power driven pumps, spoons, forks, dairy machinery from 12 per cent to 18 per cent.

Mandatory generation of e-way bills by states for intra-state transportation of gold and precious stones has also been approved by the Council, but the decision on the threshold has been left to the states.