Posted on 27-01-2018:
The Central Government today notified
the change in rate of Goods and Services Tax (GST) as recommended by the GST
Council in its last meeting. The Union Finance Minister Arun Jaitley Chaired
the 25th Meeting of the GST Council held on 18th January has recommended
changes in Tax rate on thirty three Services. The Council has recommended many
relief measures regarding GST rates on goods and services covering many sectors
and commodities. The Council has also recommended issuance of
certain clarifications on issues relating to GST rates and taxability of
certain goods and services.
(A) Exemptions
/ Changes in GST Rates / ITC Eligibility Criteria
To extend
GST exemption on Viability Gap Funding (VGF) for a period of 3 years from the
date of commencement of RCS airport from the present period of one year.
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To exempt supply of services by way
of providing information under RTI Act, 2005 from GST.
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To exempt legal services provided
to Government, Local Authority, Governmental Authority and Government Entity.
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To reduce GST rate on construction
of metro and monorail projects (construction, erection, commissioning or
installation of original works) from 18% to 12%.
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To levy GST on the small
housekeeping service providers, notified under section 9 (5) of GST Act, who
provide housekeeping service through ECO, @ 5% without ITC.
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To reduce GST rate on tailoring
service from 18% to 5%.
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To reduce GST rate on services by
way of admission to theme parks, water parks, joy rides, merry-go-rounds,
go-carting and ballet, from 28% to 18%.
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To grant
following exemptions:
(i)
To exempt service by way of transportation of
goods from India to a place outside India by air;
(ii) To
exempt service by way of transportation of goods from India to a place
outside India by sea and provide that value of such service may be excluded
from the value of exempted services for the purpose of reversal of ITC. The above
exemptions may be granted with a sunset clause upto 30th September, 2018.
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To exempt services provided
by the Naval Insurance Group Fund by way of Life Insurance to
personnel of Coast Guard under the Group Insurance Scheme of the
Central Government retrospectively w.e.f. 1.7.2017.
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To exempt IGST payable under
section 5(1) of the IGST Act, 2017 on supply of services covered by item 5(c)
of Schedule II of the CGST Act, 2017 to the extent of aggregate of the
duties and taxes leviable under section 3(7) of the Customs Tariff Act,
1975 read with sections 5 & 7 of IGST Act, 2017 on part of consideration
declared under section 14(1) of the Customs Act, 1962 towards royalty and
license fee includible in transaction value as specified under Rule 10 (c) of
the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.
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To allow ITC of input services in
the same line of business at the GST rate of 5% in case of tour operator
service.
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To reduce GST rate (from 18% to
12%) on the Works Contract Services (WCS) provided by sub-contractor to the
main contractor providing WCS to Central Government, State Government, Union
territory, a local authority, a Governmental Authority or a Government
Entity, which attract GST of 12%. Likewise, WCS attracting 5% GST, their
sub-contractor would also be liable @ 5%.
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To enhance the exemption limit of
Rs 5000/- per month per member to Rs 7500/- in respect of services provided
by Resident Welfare Association (unincorporated or nonprofit entity) to its
members against their individual contribution.
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To reduce GST rate on
transportation of petroleum crude and petroleum products (MS, HSD, ATF) from
18% to 5% without ITC and 12% with ITC.
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To exempt dollar denominated
services provided by financial intermediaries located in IFSC SEZ, which have
been deemed to be outside India under the various regulations by RBI, IRDAI,
SEBI or any financial regulatory authority, to a person outside India.
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To exempt (a) services
by government or local authority to governmental authority or government
entity, by way of lease of land, and (b) supply of land or undivided share of
land by way of lease or sub lease where such supply is a part of
specified composite supply of construction of flats etc. and to
carry out suitable amendment in the provision relating to valuation of
construction service involving transfer of land or undivided share of land,
so as to ensure that buyers pay the same effective rate of GST on
property built on leasehold and freehold land.
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To amend entry 3 of notification
No. 12/2017-CT(R) so as to exempt pure services provided to Govt. entity.
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To expand pure services exemption
under S. No. 3 of 12/2017-C.T. (Rate) so as to include composite supply
involving predominantly supply of services i.e. upto 25% of supply of goods.
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To reduce job work services rate
for manufacture of leather goods (Chapter 42) and footwear (Chapter 64) to
5%.
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To exempt services relating to
admission to, or conduct of examination provided to all educational institutions,
as defined in the notification.
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To exempt services by educational
institution by way of conduct of entrance examination against consideration
in the form of entrance fee.
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To enhance the limit to Rs 2 lakh
against Sl. No. 36 of exemption notification No. 12/2017-C.T. (Rate) which
exempts services of life insurance business provided under life micro
insurance product approved by IRDAI upto maximum amount of cover of Rs.
50,000.
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To enhance the limit to Rs 2 lakh
against Sl. No. 36 of exemption notification No. 12/2017-C.T. (Rate) which
exempts services of life insurance business provided under life micro
insurance product approved by IRDAI upto maximum amount of cover of Rs.
50,000.
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To exempt reinsurance services in
respect of insurance schemes exempted under S.Nos. 35 and 36 of notification
No. 12/2017-CT (Rate).
[It is expected that the premium amount charged from the government/insured in respect of future insurance services is reduced.] |
To increase threshold limit for
exemption under entry No. 80 of Notification No. 12/2017-C.T.
(Rate) for all the theatrical performances like Music, Dance, Drama,
Orchestra, Folk or Classical Arts and all other such activities in any Indian
language in theatre GST from Rs.250 to 500 per person and to also extend the
threshold exemption to services by way of admission to a planetarium.
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To reduce GST on Common Effluent
Treatment Plants services of treatment of effluents, from 18% to 12%.
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To exempt services by way of
fumigation in a warehouse of agricultural produce.
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To reduce GST to 12% in respect of
mining or exploration services of petroleum crude and natural gas and for
drilling services in respect of the said goods.
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To exempt subscription of online
educational journals/periodicals by educational institutions who provide
degree recognized by any law from GST.
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To exempt the service provided by
way of renting of transport vehicles provided to a person providing services
of transportation of students, faculty and staff to an educational
institution providing education upto higher secondary or equivalent.
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To extend the concessional rate of
GST on houses constructed/ acquired under the Credit Linked Subsidy
Scheme for Economically Weaker Section (EWS) / Lower Income Group (LIG) /
Middle Income Group-1 (MlG-1) / Middle Income Group-2 (MlG-2) under the
Housing for All (Urban) Mission/Pradhan MantriAwasYojana (Urban) and low-cost
houses up to a carpet area of 60 square metres per house in a housing project
which has been given infrastructure status, as proposed by Ministry of
Housing & Urban Affairs, under the same concessional rate.
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To tax time charter services at GST
rate of 5%, that is at the same rate as applicable to voyage charter or bare
boat charter, with the same conditions.
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To levy concessional GST @12% on
the services provided by way of construction, erection, commissioning,
installation, completion, fitting out, repair, maintenance, renovation, or
alteration of building used for providing (for instance, centralized cooking
or distributing) mid-day meal scheme by an entity registered under section
12AA of IT Act.
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To exempt services provided by and
to FédérationInternationale de Football Association (FIFA) and its
subsidiaries directly or indirectly related to any of the events under FIFA
U-20 World Cup in case the said event is hosted by India.
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To exempt government’s share of
profit petroleum from GST and to clarify that cost petroleum is not
taxable per se.
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(B)
Rationalization of certain exemption entries
To provide
inCGST rules that value of exempt supply under sub-section (2) of section 17,
shall not include the value of deposits, loans or advances on which interest
or discount is earned (This will not apply to a banking company and a
financial institution including a non-banking financial company engaged in
providing services by way of extending deposits, loans or advances).
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To defer the liability to pay GST
in case of TDR against consideration in the form of construction service and
on construction service against consideration in the form of TDR to the time
when the possession or right in the property is transferred to the land owner
by entering into a conveyance deed or similar instrument (eg. allotment
letter). No deferment in point of taxation in respect of cash component.
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To tax renting of immovable
property by government or local authority to a registered person under
reverse Charge while renting of immovable property by government or local
authority to un-registered person shall continue under forward charge
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To define insurance agent in the
reverse charge notification to have the same meaning as assigned to it
in clause (10) of section 2 of the Insurance Act, 1938, so that
corporate agents get excluded from reverse charge.
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To insert a provision in GST
Rules under section 15 of GST Act that the value of lottery shall be
100/112 or 100/128 of the price of lottery ticket notified in the Gazette
(the same is currently notified in the rate notification).
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To add, in the GST rate schedule
for goods at 28%, actionable claim in the form of chance to win in betting
and gambling including horse racing.
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To insert in GST rules under
section 15 of GST Act.
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Click here for the Notification: Notification No. 2/2018- Central Tax (Rate)
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