GST Council Finalises 4-slab Service Tax Structure
The GST Council headed by finance Minister Arun Jaitley has finalised a 4-slab service tax structure at the rates of 5, 12, 18 and 28 per cent as against the single rate of 15% levied on all taxable services. GST regime is scheduled to be implemented from July 1. In the next GST Council meeting, tax rates on gold and other precious metals will be taken up for discussion.
Luxury hotels, gambling, race club betting and cinema services will attract a tax rate of 28%.
Education, healthcare and non-AC rail travel will remain exempted from the GST tax regime. However, the states will be given the option to levy additional taxes on cinema to compensate for the revenue losses entailed due to merging of entertainment tax with GST. At present, the total tax incidence on cinema including entertainment and service tax is in the range of 55%. The states need to use the legislative route if it wants to levy additional tax on cinema.
States will also be permitted to levy any new tax as the taxation powers of the states have only been restricted and not abolished after the rollout of GST.
Telecom and financial services will be taxed at a rate of 18%.
Transport services will be taxed at the rate of 5%. Cab aggregators like Ola and Uber will have to pay 5% under GST in place of 6%. AC rail travel will attract 5% tax. Economy class air travel will attract 5 % GST while business class will attract 12%. Travelling on metro, local train and religious travel such as Haj Yatra would be exempted from GST.
The e-commerce players like Flipkart and Snapdeal would be required to shell out 1% Tax Collected at Source (TCS).
Non-AC restaurants and AC restaurants will attract a GST of 12% and 18% respectively.
Advertisements published in newspapers will attract 5% GST. At present it is exempt from service tax.
Month: Current Affairs - May, 2017