GST Tax Rate on Services

GST Tax Rate

GST Tax Rate On Services & Under Reverse Charge

During the 14th GST Council meeting held at Srinagar, Jammu & Kashmir on 19 May 2017, the Council has broadly approved the GST Tax rate for services at Nil, 5%, 12%, 18% and 28% as listed below.

New GST Tax rate is likely to affect every field of life like watching movies, eating food in restaurants, Phone bills, electricity bills, water bills, Travel by Road, by train or by Air,  visits to amusement and water parks, salon etc. Also, there is residuary clause which provides that services not falling in any category with fall under tax rate of 18%.

Total 36 services has been covered with 36th being residuary clause.

GST Tax rate on some important services in brief:

  • On Transport of goods/services by rail (other than sleeper class) – Rate is 5% & ITC allowed.
  • Services of goods transport agency (GTA) – Rate is 5% & ITC not allowed.
  • Renting of motor cab – Rate is 5% & ITC not allowed. However, if fuel is provided by service recipient, rate would be 18%
  • Transport of passengers, by Radio Taxi or other AC carriage – Rate is 5% & ITC not allowed.
  • Air Transport of passengers in economy class- Rate is 5% & ITC allowed.
  • Air Transport of passengers in other than economy class- Rate is 12% & ITC allowed.
  • Supply of tour operators’ services- Rate is 5% & ITC not allowed.
  • Selling of space for advertisement in print media- Rate is 5% & ITC allowed.
  • Supply of Food/ drinks in restaurant not having facility of air-conditioning or central heating at any time during the year and not having license to serve liquor- Rate is 12% & ITC allowed.
  • Supply of Food/ drinks in restaurant having license to serve liquor OR having facility of air-conditioning or central heating at any time during the year. Rate is 18% & ITC allowed.
  • Supply of Food/ drinks in outdoor catering- Rate is 18% & ITC allowed.
  • Bundled service by way of supply of food or any other article of human consumption or any drink, in a premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organizing a function) together with renting of such premises- Rate is 18% & ITC allowed.
  • Supply of Food/ drinks in air-conditioned restaurant in 5-star or above rated Hotel- Rate is 28% & ITC allowed.
  • Renting of hotels, inns, guest houses, having room tariff Rs.1000 and above but less than Rs.2500 per room per day. Rate is 12% & ITC allowed. If Tariff is between Rs 2500 to Rs 5000- Rate is 18% & ITC allowed.
  • Construction of a complex, building, civil structure or a part thereof, intended for sale to a
    1. Buyer, wholly or partly.[The value of land is included in the amount charged from the service recipient] Rate is 12% & ITC allowed. But no refund for excess ITC.
  • Composite supply of Works contract as defined in clause 119 of section 2 of CGST Act- Rate is 18% & ITC allowed.
  • Gambling; Race clubs etc – Rate is 28% & ITC allowed.
  • Services by way of admission to entertainment events or access to amusement facilities
    1. including exhibition of cinematography films, theme parks, water parks, joy rides, merry-go rounds, go-carting, casinos, race-course, ballet, any sporting event such as IPL Rate is 28% & ITC allowed.
  • Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration (supply of service) to attract the same GST rate and compensation cess as applicable on supply of similar goods which involves any transfer of title in goods (supply of goods)-Same rate of GST and compensation cess as on supply of similar goods.
  • Any transfer of right in goods or of undivided share in goods without the transfer of title thereof (supply of services) to attract the same GST Tax rate and compensation cess as applicable on supply of similar goods which involves any transfer of title in goods (supply of goods). Same rate of GST and compensation cess as on supply of similar goods.
  • Supply consisting of transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed (supply of goods): value of leasing services shall be included in the value of goods supplied. GST and compensation cess as on supply of similar goods.
  • ALL OTHER SERVICES NOT SPECIFIED ELSEWHERE- Rate is 18% & ITC allowed.

LIST OF SERVICES ON WHICH GST IS CHARGED ON REVERSE CHARGE

In following types of services, GST would be charged under reverse charge mechanism:

  • Service Provided by Any person who is located in a non-taxable territory. Here 100% GST would be paid by any person located in the taxable territory other than non-assesse online recipient.
  • Services provided by a goods transport agency(GTA) in respect of transportation of goods by road. Here, service recipient will pay 100% GST. Service recipient can be any factory, society, cooperative society, any person registered under GST, any company, partnership firm of casual taxable person.
  • Services provided an individual advocate or firm of advocates. Here, 100% GST payable by any business entity.
  • Services provided by an arbitral tribunal. Here, 100% GST payable by any business entity.
  • Sponsorship services provided by any person. Here, 100% GST payable by any Company or Partnership firm.
  • Services provided by a director of a company to the said company;Here, 100% GST payable by such Company.
  • Services provided by an insurance agent to any person carrying on insurance business. Here, 100% GST payable by person carrying on insurance business.
  • Services provided by a recovery agent. Here, 100% GST payable by a banking company or a financial institution or a non banking financial company.
  • Services provided by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India by a person located in non-taxable territory to a person located in non-taxable territory. Here, 100% GST payable by Importer.
  • Service provided by Author or music composer, photographer,artist, etc. Here, 100% GST payable by Publisher, Music company, Producer.
  • Services provided by Taxi driver or Rent a caboperator through electronic commerce operator to any person. Here, 100% GST payable by Electronic Commerce Operator