The GST Council, on the second day of its 2-day meeting in Srinagar, has considered and finalised GST to be applicable for different types of services. Some key aspects related to services of the meeting have been captured below:
- As against expectations, the government has finalised four tax rates that will apply to services, namely 5%, 12%, 18% and 28%.
- Education and Healthcare services to be exempt under GST
- Transportation services to be taxed at 5%
- Aggregators like Ola and Uber to be taxed at 5%
- Economy class air travel to attract 5% GST and business class 12%
- Complications which currently exist at the time of charging tax on Works Contract should be eased with Works Contract set to be taxed at 12%.
- 5 Star and AC restaurants to attract
higher taxes:
- Restaurants with a turnover of INR 5 million or less will levy 5% GST
- Restaurants without a liquor license and with a turnover higher than INR 5 million will be charged 12% GST.
- AC restaurants and restaurants with a liquor license to fall under the 18% tax slab.
- 5 Star hotels to levy 28% GST
- Hotels with tariff below INR 1000 to be exempt
- Hotels with tariff of INR 1000-2500 will levy 12% GST
- Hotels with tariff above INR 2500 but below INR 5000 would attract 18% GST.
- Hotels with tariff above INR 5000 to charge 28% GST.
- Telecom and Financial services to attract 18% GST
- The highest tax slab i.e. 28% would be reserved for luxury services like cinemas, betting, etc.
- No consensus on the fixation of rate on gold
- List of exemptions which are in existence as per the current legislation being grandfathered are likely to continue in the GST regime.
SKP's
comments
|
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.