close
This ad will auto close in 10 seconds

GST rates for services finalised: Education, healthcare to be exempted; telecom, financial services to attract 18% tax

The GST Council finalised four tax rates of 5, 12, 18 and 28 percent to apply on services including telecom, insurance, hotels and restaurants under the biggest tax reform since the Independence.


GST rates for services finalised: Education, healthcare to be exempted; telecom, financial services to attract 18% tax

New Delhi: The all-powerful GST Council on Friday finalised tax rates for services under the Goods and Service Tax (GST) regime which is scheduled to be rolled out from July 1.

There will be four rates for services at 5, 12, 18 and 28 percent, similar to tax slabs for goods. Healthcare and education will be exempted from GST.

Addressing the Media after 2-day GST Council meeting in Srinagar, finance minister Arun Jaitley Jaitley said, "Restaurants with turnover of Rs 50 lakh or below will face 5 percent tax under GST while non-AC restaurant will face 12 percent tax."

Additionally, AC restaurants and those with liquor licence will be charged 18 percent GST and 5-star hotels will be levied 28 percent. Meanwhile hotels with tariff of Rs 1,000-2,500 will have to pay 12 percent rate, he added.

Five percent GST will be levied on cab aggregrators like Ola and Uber, said Jaitley.

Telecom and financial services will be taxed at a standard rate of 18 percent. Entertainment tax will be merged with service tax under the GST and a composite 28 percent levy charged on cinema services as well as gambling and betting at race course.

Travelling on metro, local train and religious travel including Haj yatra will all continue to be exempt from GST, Revenue Secretary Hashmukh Adhia said. Economy class air travel will attract 5 percent GST while business class will be charged 12 percent, he said.

The tax rate on gold has not been finalised yet. The GST Council will meet again on June 3.

The GST rates for all but six items were finalised at the first day of the two-day meeting of the GST Council, headed by Union Finance Minister Arun Jaitley and comprising state representatives.

Prices of foodgrains, especially wheat and rice, will come down as they will be exempt from the GST. Currently, some states levy Value Added Tax (VAT) on them.
"We have finalised tax rates for a majority of items as well as the exempt list (at today's meeting)," Jaitley told reporters.

Out of the 1,211 items, the GST rate for all but six was decided on the first day, he said.

"Rates have been finalised for the rest," he said, adding GST for packaged food items is to be finalised later.

"(With) the standard rate items of 12.5 percent and 15 percent, plus the cascading effect of local taxes, the tax rate was going up to 30-31 percent. These 30-31 percent taxes... Have all been brought down to 28 percent.

"Of these, some are items to be used by common man soap, oil -- that has been brought down to 18 percent. So there will be a substantial reduction as far as those items are concerned. We have kept one criteria in mind that the overall impact is not inflation, in fact it brings down the costs," Jaitley added.

Revenue Secretary Hasmukh Adhia said 7 percent of the items fall under the exempt list while 14 percent have been put in the lowest tax bracket of 5 percent. Another 17 percent items are in 12 percent tax bracket, 43 percent in 18 percent tax slab and only 19 percent of goods fall in the top tax bracket of 28 percent.

As many as 81 percent of the items will attract 18 percent or less GST.

From Zee News

0 Comment - Join the Discussions