PTI
SRINAGAR
Education and healthcare will continue to be exempted from tax in the upcoming GST regime that will see service tax incidence go up on telecom, business class air travel, insurance and sale of newspaper space for advertisement.
Transport services will be taxed at 5 per cent leading to a small drop in economy class air travel which currently attracts 6 per cent service tax.
Non AC train travel, including in local trains and metro, as well as religious travel including Haj yatra will remain exempted from GST.
Five per cent rate will also apply to cab aggregators like Ola and Uber, which currently pay 6 per cent tax.
AC train travel will attract 5 per cent service tax, same as freight levy.
The all-powerful GST Council finalised four tax rates of 5, 12, 18 and 28 per cent for services including telecom, insurance, hotels and restaurants under the biggest tax reform since the Independence.
The rates are in line with those finalised for goods.
With this, rates of all items except a handful including gold, have been decided ahead of the roll out of the Goods and Services Tax (GST) regime from July 1.
Space selling for advertisement in newspapers will attract 5 per cent levy in GST. It is exempted from tax currently.
Briefing reporters here after the two-day meeting of the Council, Finance Minister Arun Jaitley said telecom and financial services will be taxed at a standard rate of 18 per cent.
Service tax on telecom like phone bill payment totals to 15 per cent at present.
However, Revenue Secretary Hashmukh Adhia insisted that the tax incidence on telecom services will be unchanged at 15 per cent after the input credit is taken on equipment.
While economy class air travel will attract 5 per cent GST, the business class will be charged at 12 cent, he said.
Jaitley said non-AC restaurants will charge 12 per cent GST on food bill. The tax rate for AC restaurants and those with liquor licence will be 18 per cent, while 5-star hotels will charge 28 per cent GST.
Restaurants with Rs 50 lakh or below turnover will go under the 5 per cent composition, he said.
SERVICES@5
PER CENT
Transport; Ola & Uber also in bracket
AC train travel
Advertisements in
newspapers
Economy class air travel
Restaurants with turnover of ` 50 lakh or below
SERVICES@12 PER CENT
Business class air travel
Food bill at non-AC restaurants
Work contracts like white washing
Room rate for hotels with ` 1,000 to ` 2,000 tariff per day
SERVICES@18
PER CENT
Telecom & financial services including banking
AC restaurants and those with liquor licence
Room rate for hotels with ` 2,500 to ` 5,000 tariff
SERVICES@28
PER CENT
Dining at 5-star hotels
Cinema services,
gambling, betting at race course
Room rate for hotels with tariff above ` 5,000
ON THE FLIPSIDE...
Decision on gold, precious metals on June 3
Flipkart, Snapdeal to deduct 1% TCS
No tax on lottery n Corportates warned on changing rates
No rethinking July 1 deadline: Jaitley
SRINAGAR: The finer points of India’s new tax regime are in place and the government is adamant on its timely roll-out. Finance Minister Arun Jaitley said,”I think we are in a state of readiness. Minister after Minister has met me from the states and said do not blink, stick to July 1.” He said that there is no scope for rethinking the July 1 deadline.
