Press Note on GST Rate on Services

Jul 23, 2018 | by Avantis RegTech Legal Research Team

The GST Council in the meeting held at New Delhi on July 21, 2018 took following decisions relating to exemptions / changes in GST rates / ITC eligibility criteria, rationalization of rates / exemptions and clarification on levy of GST on services. The decisions of the GST Council enclosed as annexure has been presented in simple language for ease of understanding which would be given effect to through Gazette notifications/ circulars which shall have force of law.

It would be noted that multiple reliefs from GST taxation have been provided to following categories of services –

(i)                 Agriculture, farming and food processing industry,

(ii)               Education, training and skill development,

(iii)             Pension, social security and old age support.

Hotel industry has been given major relief by providing that the rate of tax on accommodation service shall be based on transaction value instead of declared tariff.

Services provided in sectors like banking, IT have been provided relief by exempting services supplied by an establishment of a person in India to any establishment of that person outside India [related party].

As a green initiative, GST on supply of e-books has been reduced from 18 to 5%.

For details of major decisions on services, annexure to this press note may be referred.

It is proposed to issue notifications giving effect to these recommendations of the Council with effect from July 27, 2018.



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