GST council, Nirmala Sitharaman, hotels, GST
Nirmala Sitharaman briefed the media about the decisions taken during GST council meeting

Hours after bringing cheer to India Inc with slashing of corporate tax, Finance Minister Nirmala Sitrharaman on Friday chaired the GST Council meeting in Goa.

As the Indian economy is reeling under an economic slowdown, several sectors had demanded rate cuts.

Addressing a press meet after the meeting concluded, Finance Minister announced the decisions taken. Of the many measures discussed, the council approved decisions on the “broader principle to promote tourism”.

Items such as plates and cups made of leaves, cut and polished semi-precious stones and imports of specified defence goods will get cheaper after GST rate cuts, the FM said.

Earlier in the day, the Nirmala Sitharaman announced that domestic companies will pay 22 per cent tax on their income with effect from April 1, 2019, as opposed to the previous 30 per cent. All additional lives will now be at a rate of 25.2 per cent and applicable to companies that aren’t availing any incentives or exemptions.

The GST council meeting comes against the backdrop of a dismal slowdown in India’s GDP growth which fell to a 25 quarter-low of 5 per cent in the April-June quarter this year.

Some major decisions taken during the meeting include:

Compensation cess on petrol, diesel vehicles

The compensation cess on petrol vehicles with 10-13 person capacity has been reduced to 1%, while on diesel vehicles for the same capacity, it has been cut to 3%.

Hotel room rates to have three GST slabs

To boost tourism, there will be nil GST for hotel rooms with Rs 1000 or less tariff. Those having tariff in the range of Rs 1,001 to Rs 7,500 will have 12% GST, while those above Rs 7,501 it attract a GST of 18%.

Caffeinated drinks costlier

On caffeinated drinks, the GST rate has been raised from 18% to 28%, with an additional cess of 12%.

Aerated drinks

Manufacturers of aerated drink manufacturers will not be able to avail compensation scheme.

Precious and semi-precious stones

GST rate has been slashed on precious and semi-precious stones.

Polyethylene bags

There will be a uniform GST rate of 12% for woven/non-woven polyethylene bags, Nirmala Sitharaman announced.


On Exports, the Finance Minister said the council was of the view that exports must be promoted in “big way”.


For jewellery, exports will now be exempted from GST.

GST rate on railway coaches

GST rate on railway coaches and wagons have now been raised from 5% to 12%.

Defence goods

Nirmala Sitharaman announced that defence goods will be exempted from GST/IGST as they are procured from abroad and not manufactured in India.


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