DYKS No. : 504 | Date : 22/05/2017

Dear Professional Colleague,

GST Council finalizes GST rates, exemptions and services covered under reverse charge

Dear Professional Colleague,

The 14th Goods and Services Tax (GST) Council Meeting, chaired by the Union Minister of Finance Shri Arun Jaitley, was held at Srinagar, Jammu and Kashmir. On the first day of meeting, the Council has broadly approved the GST rates for goods at nil rate, 5%, 12%, 18% and 28%. The Council has also broadly approved the rates of GST Compensation Cess to be levied on certain goods.

On the second day of its meeting, the GST Council finalised the fitment of various services into the GST rate slabs of 0%, 5%, 12%, 18% and 28%. In addition, GST Council has approved list of services continued to be exempt under GST, list of services covered under reverse charge mechanism and new scheme for classification of goods.

Some of the key highlights are:

  1. GST Rates for Goods:

Tax Rate

Product

Nil

Live animal, Milk, curd, lassi, butter milk, Fresh vegetables, Fresh fruits(other than in frozen state),Cereals(other than bearing a registered brand name), Flour, Aata, Maida, Besan (other than bearing a registered brand name), Pappad and bread(branded or not), Prasadam supplies by religious place, Coconut powder, Water [other than aerated mineral purified distilled),Common Salt, Human blood, Organic manure, Kumkum, sindur, bindi, alta, clinical waste, Plastic bangles, Printed books, Passenger bags.

5%

Yogurt, Fresh fruits in frozen state, Coffee, tea, Vegetable fats and oils, Khandsari sugar, Pizza bread, seviyan, Rusks, Tobacco leaves, Salt other than common salt, Ores and concentrates (e.g. Iron, copper, nickle, cobalt etc.), Handmade safety matches, Vaccines, Brochures, leaflets, Broomsticks and Muddhas.

12%

Live horses, Frozen meat in unit containers, Butter, ghee and cheese, Dry fruits, Fruit Juice, fruit juice based drinks, Ice and snow, Marble block, granite block, Iodine, Candles, photographic plates and films for x ray for medical use, Tractors, bicycles, Children’s picture, drawing or colouring books, Fertilizers, fountain pen ink, ball pen ink, Tooth powder, aggarbati, Feeding bottles, Umbrella, Utensils, Tables or kitchen or other household articles, Telephones for cellular networks, Sports goods.

18%

Refined sugar, Pasta, corn flakes, pastries and cakes, Instant tea, tea aroma, Sauces, Soups, Ice cream, Sharbat, Supari, Ethyl alcohol, Vinegar, Hair oil, Soap, Insecticides, rodenticides, herbicides Electric motors and generators, Electronic Toys like tricycles, scooters.

28%

Molasses, Chewing gum, bubble gum and white chocolate, Custard powder, Pan masala, Aerated waters, Marble and granite other than block, Perfumes, beauty or make-up preparations, shampoo, hair cream, Tooth paste, Fireworks, Cars.

For complete list please click here

  1. Rates for Services:

Tax Rate

Condition

Nature of Service

5%

With ITC of input service

Goods transport by rail, passenger transport by rail (other than sleeper class), Transport of goods in a vessel from place outside India to custom station, Passenger by air in economy class (in normal airport), Passenger by air in regional connectivity scheme airport, Leasing of aircrafts(scheduled airlines+ scheduled operation)

Without ITC

GTA for goods and used household goods, Renting of Motorcab, passengers  transport by AC contract/stage carriage (other than motorcab) and radio taxi, tour operator

With full ITC

Advertisement in print media, Job work in relation to printing of newspaper

12%

With ITC of Input Service

Foreman of chit fund

With full ITC

Goods transport in containers by rail by any person other than Indian Railways, Passenger transport by air(other than economy), Restaurant(NON AC+ No license to serve liquor),Hotel(room tariff-Rs 1000 and above but less than 2500 per room per day), Construction service(value of land included)*,Transfer of intellectual property(no right to use)

*no refund of overflow of ITC

18%

With full ITC

Restaurant having AC or serving liquor, outdoor catering,Hotel (room tariff more than Rs 2500 above and less than Rs 5000 per room per day), Bundle of food/drinks along with shamiana, pandal, Admission to circus, Indian classical dance,theatre, drama, Composite works contract, All services not specified elsewhere(Residuary entry)

28%

With full ITC

Admission to entertainment/amusement facility, Service by race club, Gambling, AC Restaurant in 5 star or above rated hotel, Hotel(room tariff above Rs. 5000 per night per room)

No ITC

Renting of motor cab(if fuel cost borne by SR)

Same rate of GST & compensation cess as on supply of similar goods

With full ITC

Transfer of right to use goods(for those goods which attract same GST burden &  compensation cess as on sale of goods),Transfer of right in goods or undivided share in goods w/o transfer of title(for those goods which attract same GST burden &  compensation cess as on sale of goods), Transfer of title in goods in which property shall pass at a future dateupon payment of full consideration(value of leasing service shall be included in value of goods supplied)

  1. Services Exempt from GST: Broadly all services presently covered under Negative List and Mega Exemption Notification are kept under exemption. For list of exempted services, please click here

  2. Services covered under RCM (100% reverse charge):

    1. Services imported other than online information and database access and retrieval services provided to non-assessee.

    2. Services provided by GTA to specified persons.

    3. Legal Services provided by advocates to business entity.

    4. Services provided by Arbitral tribunal to business entity.

    5. Sponsorship services provided to body corporate or partnership firm.

    6. Services (excluding few) provided by government to business entity.

    7. Services provided by Director to company or body corporate.

    8. Services provided by insurance agent to insurance company.

    9. Services provided by recovery agent to banking company.

    10. Transportation of goods by a vessel from a place outside India up to the customs station of clearancein India provided person located in non-taxable territory.

    11. Services of transfer or right to use of copyright by author, music composer, photographer, artist etc to publisher, music company, producer.

    12. Radio taxi or Passenger Transport Services provided through electronic commerce operator.

The Council is yet to conclude on the rate of tax on gold and other precious metals, packaged food, textile, cigarettes and footwear.


Hope the information will assist you in your Professional endeavors.

 

With regards,
Atul Kumar Gupta
B Com (Hons) FCA, FCMA, LLB, MIMA, CIQA, PGDEMM
Central Council Member of ICAI (2016-2019)
Former Chairman NIRC of Institute of Chartered Accountants of India
Former Chairman NIRC of Institute of Cost Accountants of India
Author of “Comprehensive Guide to Service Tax” & “GST Concept & Roadmap”
Mobile : 9810103611
Email : atul@servicetax.net