Transport to be taxed at 5%; restaurants with turnover of Rs 50 lakh or below will face 5% tax
Govt has finalised four tax rates that will apply to services including telecoms, insurance, hotels and restaurants under a new sales tax which should be rolled out on July 1, Finance Minister Arun Jaitley said on Friday.
The tax rates will be 5%, 12%, 18% and 28% – in line with those applying to goods. Jaitley added that health care and education would remain exempted under the landmark GST.
Telecoms and financial services will be taxed at a standard rate of 18% while transport services will be taxed at 5%, Jaitley told reporters after a meeting of the GST Council in Srinagar.
The finance minister said that various categorisations were made under GST based on the nature of services.
Transport services would be taxed at 5 per cent, he said, adding that restaurants with turnover of Rs 50 lakh or below would face a 5 per cent tax under GST, and non-AC restaurants at 12 per cent. AC restaurants and those with liquor licences would charge GST at 18 per cent, 5-star hotels at 28 per cent; and hotels with tariff of Rs 1,000-2,500 and 12 per cent rate, he said.
The GST Council would again meet on June 3.
Telecom and financial services, Jaitley said, would attract GST at 18 per cent, and race clubs, betting and cinema halls at 28% per cent. E-commerce players like Flipkart, Snapdeal will have to deduct 1% TCS (tax collected at source) while making payments to suppliers, said Revenue Secretary Hasmukh Adhia.
Travelling on metro, local train, religious travel, Haj yatra will all be exempt from GST, said Adhia.(read more)