Government of India has finally decided to abolish service tax and replace it with Goods and Service Tax (GST). GST Rate on Services in India is finalized by the GST Council and on 18th-19th May 2017 in 14th Meeting of GST Council, GST rates on services has been fixed with GST implementation date has been fixed as 1st July 2017. The GST Council has fixed the GST rates for services at Nil, 5%, 12%, 18% and 28% under GST. As per the GST council notification GST Service rates may change before implementation of GST. All the services which are not covered in exemption list or having no specific rate then GST Rate will be Taxable @18% GST Rate, Common GST Rate on Services will be 18% which has been increased from 15% from existing service tax rates.
GST rate on WCT be 18% for Composite contract with ITC on input, same has been defined under section 2(119) of THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 where : Works contract means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.
whereas GST council has decided to exempted Agriculture services, Toll Charges, Electricity distribution, renting of residential dwelling for use as residence, operators of the Common Bio-medical Waste Treatment Facility, Services by an entity registered under section 12AA i.e. Charitable Organisation, Services by educational institution, Service by IIM, Health care services by a clinical establishment, an authorised medical practitioner or para-medics total 83 exemptions available under GST on services.
Summarized List of Services and GST Tax Rate of Services
- Transport of goods by rail – rate of GST will be 5% with ITC of input services
- Transport of passengers by rail (other than sleeper class) – rate of GST will be 5% with ITC of input services
- Services of goods transport agency (GTA) in relation to transportation of goods [other than used household goods for personal use] – GST Rate of 5% with NO ITC available
- Services of goods transport agency in relation to transportation of used household goods for personal use – GST Rate of 5% with NO ITC available
- Transport of goods in a vessel including services provided or agreed to be provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India – rate of GST will be 5% with ITC of input services
- Renting of motorcab (If fuel cost is borne by the service recipient, then 18% GST will apply) – GST Rate of 5% with NO ITC available
- Transport of passengers, by-
(i) Air conditioned contract/stage carriage other than motorcab;
(ii) a radio taxi.
- Transport of passengers by air in economy class – rate of GST will be 5% with ITC of input services
- Transport of passengers, with or without accompanied belongings, by air, embarking from or terminating in a Regional Connectivity Scheme Airport. – rate of GST will be 5% with ITC of input services
- Supply of tour operators’ services – rate of GST will be 5% with NO ITC of input services
- Leasing of aircrafts under Schedule II [5 (f)] by a scheduled airlines for scheduled operations
Download List of Services with respective GST Rate and List of GST Exempted Services.
Download List of Services under reverse Charge in GST