GST Council Meet 2023: Utility vehicles to attract 22 per cent cess
NEW DELHI: The GST Council in its 50th meeting on Tuesday decided to do away with the differential rate of compensation cess on utility vehicles, and bring all such vehicles under the 22% rate. This necessarily means that multi-utility vehicles (MUVs) would also attract a 22% compensation cess.
Earlier, only utility vehicles are popularly known as SUVs with over 4-metre length, over 15,000 CC engine capacity and ground clearance of 170 mm & above would attract a 22% compensation cess (over and above 28% GST).
The Council has decided to amend the law to include all utility vehicles ‘by whatever name called’ provided they meet the parameters of length exceeding 4,000 mm, engine capacity exceeding 1500 cc and having ground clearance of 170 mm and above, said a statement issued by the Council after the meeting. It has done away with the additional consideration of ‘popularly known as SUV’ for levying 22% cess.
The Council also clarified that food and beverages sold in cinema halls will be taxed at 5% as long as they are supplied independently of the cinema exhibition service. However, if the sale of food and beverages is clubbed together with that of the ticket, the same will attract GST at the rate applicable to the service of an exhibition of cinema.
Services at restaurants are taxed at 5%, but they are not allowed to claim input tax credits for the tax they pay on their purchases. It is to be noted that multiplex owners have demanded that food and beverages sold in cinema halls be taxed at 12%, and restaurants be allowed to claim input tax credits.
Finance Minister Nirmala Sitharaman informed the media that the issue raised by multiplex owners was discussed briefly, but the council decided to continue with 5% GST on food and beverages sold in cinema halls. The Council also clarified that if a director of a company rents his/her immovable property to the company in his private or personal capacity, it will not be taxable under the reverse charge mechanism (RCM). Under the RCM, the GST is paid by the recipient of goods or services.
The Council has exempted imports of the cancer drug Dinutuximab (Quarziba) from IGST. It has exempted IGST on medicines and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases (enlisted under the National Policy for Rare Diseases) when imported for personal use subject to existing conditions. The exemption to FSMP has also been extended to imports by Centres of Excellence for Rare Diseases or any person or institution on the recommendation of any of the listed Centres of Excellence.
5% tax on Food, beverages in cinemas
The Council clarified that food and beverages sold in cinema halls will be taxed at 5% as long as they are supplied independently of the cinema exhibition service. However, if the sale of food and beverages is clubbed together with that of the cinema ticket, the same will attract goods and services tax at the rate applicable to the service of an exhibition of cinema. Services at restaurants are taxed at 5%, but they are not allowed to claim an input tax credit
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