The Union Finance Minister Shri Arun Jaitley Chaired the 25th Meeting
of the GST Council in New Delhi today. The Council has recommended many relief
measures regarding GST rates ongoods 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.
Major
recommendations of the Council are summarised below.
Changes relating to GST rates on certain services
(A) Exemptions / Changes in GST Rates / ITC Eligibility Criteria
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1.
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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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2.
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To exempt supply of services by way of providing information under RTI
Act, 2005 from GST.
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3.
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To exempt legal services provided to Government, Local Authority,
Governmental Authority and Government Entity.
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4.
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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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5.
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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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6.
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To reduce GST rate on tailoring service from 18% to 5%.
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7.
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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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8.
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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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9.
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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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10.
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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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11.
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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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12.
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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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13.
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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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14.
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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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15.
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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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16.
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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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17.
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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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18.
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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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19.
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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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20.
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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.
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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21.
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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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22.
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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.]
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23.
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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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24.
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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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25.
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To exempt services by way of fumigation in a warehouse of agricultural
produce.
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26.
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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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27.
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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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28.
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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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29.
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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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30.
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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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31.
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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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32.
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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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33.
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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
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1.
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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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2.
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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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3.
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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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4.
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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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5.
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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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6.
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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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7.
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To insert in GST rules under section 15 of GST Act,-
Notwithstanding anything contained in this chapter, value of supply of
Betting & Gambling shall be 100 % of the face value of the bet or the
amount paid into the totalizator.
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(C) Clarifications
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1.
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To clarify that exemption of Rs 1000/- per day or equivalent (declared
tariff) is available in respect of accommodation service in hostels.
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2.
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To clarify that fee paid by litigants
in the Consumer Disputes Commissions and any penalty imposed by these Commissions,
will not attract GST.
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3.
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To clarify that elephant/ camel joy rides are not classified as
transportation services and attract GST @ 18% with threshold exemption to
small services providers.
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4.
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To clarify that leasing or rental service, with or without operator,
of goods, attracts same GST as supply of like goods involving transfer
of title in the said goods. Therefore, the GST rate for the rental
services of self-Propelled Access Equipment (Boom.
Scissors/Telehandlers) is 28%.
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5.
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To clarify that,-
1) Services provided by senior
doctors/consultants/technicians hired by the hospitals, whether employees or
not, are healthcare services which is exempt.
2) Hospitals also provide healthcare
services. The entire amount charged by them from the patients including the
retention money and the fee/payments made to the doctors etc., is towards the
healthcare services provided by the hospitals to the patients and is exempt.
3) Food supplied to the in-patients as
advised by the doctor/nutritionists is a part of composite supply of
healthcare and not separately taxable. Other supplies of food by a hospital
to patients (not admitted) or their attendants or visitors is taxable.
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6.
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To clarify that services by way of,-
1. admission to entertainment events or access to amusement facilities
including casinos, race-course
2. ancillary services provided by casinos and race-course in relation
to such admission.
3. services given by race-course by way of totalisator (if given
through some other person or charged separately as fees for using totalisator
for purpose of betting,
are taxable at 28%. Services given by race-course by way of license to bookmaker which is not a service by way of betting and gambling, is taxable at 18%. |
It is proposed to issue notifications giving effect to these
recommendations of the Council on 25th January, 2018.
(Source: pib.nic.in)
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