The Finance Ministry announced that the government will raise taxes on certain goods and services including kitchenware to 18 per cent from current 12 cent.
The decision was taken after the two-day 47th GST Council Meeting that will be made effective from 18 July, 2022.
Kitchen utensils, led lights, farm machinery, solar water systems as well as services like work contracts for roads, irrigation projects, hospitals and educational institutions would now be charged at 18 per cent from an earlier rate of 12 per cent, the statement said.
The Goods and Services Tax Council decided to rationalise tax rates on certain goods and services to remove an inverted duty structure, said Finance Minister Nirmala Sitharaman in Chandigarh.
Among other things, the GST Council also approved an increase in tax on petroleum and coal bed methane to 12 per cent from 5 percent earlier, besides raising rates for packaged food items. While the GST on e-waster was revised from current 5 per cent to 18 per cent.
The government will now impose a 18 per cent tax on cheques, lose or in book form and parts of goods of heading 8801. However, maps, and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed will invite a 12 per cent GST. All these products were earlier charged nil.
Following the announcements by FM Sitharaman, analysts said higher taxes would put an additional burden on households who are already facing a surge in food and energy prices.
“The tax on agricultural items like packaged cereals, wheat, maize, rice, which are unbranded but sold in a labelled package may increase by 5%,” Tax Connect Advisory Vivek Jalan said.
“Edible oils as well as milk products are likely to become costlier as a result of the GST rate increases,” he said.
The consumer price index-based inflation rose 7.04 per cent year-on-year in May, after touching an eight-year high of 7.79 per cent in April, but remained above the central bank’s tolerance band of 6 per cent for a fifth month in a row.