Decisions relating to Services in the 25th meeting of GST
Council held at New Delhi on 18.01.2018
The following decisions relating to
exemptions / changes in GST rates / ITC eligibility criteria, rationalization
of rates / exemptions and clarification on levy of GST on services were taken
by the Council in the meeting held at New Delhi on 18.01.2018. The information
is being uploaded immediately after the GST Council’s decision and it will be
subject to further vetting during which the list may undergo some changes. The
decisions of the GST Council are being communicated for general information and
will be given effect to through Gazette notifications / circulars which shall
have force of law.
(A)
Exemptions / Changes in GST
Rates / ITC Eligibility Criteria
(1)To extend GST exemption on Viability Gap
Funding (VGF) for a period of 3 years from the date of commencement of RCS
airport from the present period of one year.
(2)To exempt supply of services by way of
providing information under RTI Act, 2005 from GST.
(3)To exempt legal services provided to
Government, Local Authority, Governmental Authority and Government Entity.
(4)To reduce GST rate on construction of
metro and monorail projects (construction, erection, commissioning or
installation of original works) from 18% to 12%.
(5)To levy GST on the small housekeeping
service providers, notified under section 9 (5) of GST Act, who provide
housekeeping service through ECO, @ 5% without ITC.
(6)To reduce GST rate on tailoring service
from 18% to 5%.
(7)To reduce GST rate on services by way of
admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and
ballet, from 28% to 18%.
(8)To grant following exemptions:
To exempt service by way of transportation of
goods from India to a place outside India by air;
To exempt service by way of transportation of
goods from India to a place outside India by sea and provide that value of such
service may be excluded from the value of exempted services for the purpose of
reversal of ITC. The above exemptions may be granted with a sunset clause upto
30th September, 2018.
(9)To exempt services provided by the Naval Insurance Group Fund by way of Life Insurance to personnel of Coast Guard
under the Group Insurance Scheme of the
Central Government retrospectively w.e.f. 1.7.2017.
(10)To exempt IGST payable under section 5(1)
of the IGST Act, 2017 on supply of services covered by item 5(c) of Schedule II
of the CGST Act, 2017 to the extent of aggregate of the duties and taxes leviable
under section 3(7) of the Customs Tariff Act, 1975 read with sections 5 & 7
of IGST Act, 2017 on part of consideration declared under section 14(1) of the
Customs Act, 1962 towards royalty and license fee includible in transaction
value as specified under Rule 10 (c) of the Customs Valuation (Determination of
Value of Imported Goods) Rules, 2007.
(11)To allow ITC of input services in the
same line of business at the GST rate of 5% in case of tour operator service.
(12)To reduce GST rate (from 18% to 12%) on
the Works Contract Services (WCS) provided by sub-contractor to the main
contractor providing WCS to Central Government, State Government, Union
territory, a local authority, a Governmental Authority or a Government Entity,
which attract GST of 12%. Likewise, WCS attracting 5% GST, their sub-contractor
would also be liable @ 5%.
(13)To enhance the exemption limit of Rs
5000/- per month per member to Rs 7500/- in respect of services provided by
Resident Welfare Association (unincorporated or nonprofit entity) to its
members against their individual contribution.
(14)To reduce GST rate on transportation of
petroleum crude and petroleum products (MS, HSD, ATF) from 18% to 5% without
ITC and 12% with ITC.
(15)To exempt dollar denominated services
provided by financial intermediaries located in IFSC SEZ, which have been
deemed to be outside India under the various regulations by RBI, IRDAI, SEBI or
any financial regulatory authority, to a person outside India.
(16)To
exempt (a) services by government
or local authority to governmental authority or government entity, by way of
lease of land, and (b) supply of land or undivided share of land by way of
lease or sub lease where such supply is a part of specified composite supply of construction of
flats etc. and to carry out suitable
amendment in the provision relating to valuation of construction service
involving transfer of land or undivided share of land, so as to ensure that
buyers pay the same effective rate of GST on property built on leasehold
and freehold land.
(17)To amend entry 3 of notification No.
12/2017-CT(R) so as to exempt pure services provided to Govt. entity.
(18)To expand pure services exemption under
S. No. 3 of 12/2017-C.T. (Rate) so as to include composite supply involving
predominantly supply of services i.e. upto 25% of supply of goods.
(19)To reduce job work services rate for
manufacture of leather goods (Chapter 42) and footwear (Chapter 64) to 5%.
(20)To exempt services relating to admission
to, or conduct of examination provided to all educational institutions, as
defined in the notification. To exempt services by educational institution by
way of conduct of entrance examination against consideration in the form of
entrance fee.
(21)To enhance the limit to Rs 2 lakh against
Sl. No. 36 of exemption notification No. 12/2017-C.T. (Rate) which exempts
services of life insurance business provided under life micro insurance product
approved by IRDAI upto maximum amount of cover of Rs. 50,000.
(22)To exempt reinsurance services in respect
of insurance schemes exempted under S.Nos. 35 and 36 of notification No.
12/2017-CT (Rate). [It is expected that the premium amount charged from the
government/insured in respect of future insurance services is reduced.]
(23)To increase threshold limit for exemption
under entry No. 80 of Notification No. 12/2017-C.T. (Rate) for all the
theatrical performances like Music, Dance, Drama, Orchestra, Folk or Classical
Arts and all other such activities in any Indian language in theatre GST from
Rs.250 to 500 per person and to also extend the threshold exemption to services
by way of admission to a planetarium.
(24)To reduce GST on Common Effluent
Treatment Plants services of treatment of effluents, from 18% to 12%.
(25)To exempt services by way of fumigation
in a warehouse of agricultural produce.
(26)To reduce GST to 12% in respect of mining
or exploration services of petroleum crude and natural gas and for drilling
services in respect of the said goods.
(27)To exempt subscription of online
educational journals/periodicals by educational institutions who provide degree
recognized by any law from GST.
(28)To exempt the service provided by way of
renting of transport vehicles provided to a person providing services of
transportation of students, faculty and staff to an educational institution
providing education upto higher secondary or equivalent.
(29)To extend the concessional rate of GST on
houses constructed/ acquired under the Credit Linked Subsidy Scheme for
Economically Weaker Section (EWS) / Lower Income Group (LIG) / Middle Income
Group-1 (MlG-1) / Middle Income Group-2 (MlG-2) under the Housing for All
(Urban) Mission/Pradhan Mantri Awas Yojana (Urban) and low-cost houses up to a
carpet area of 60 square metres per house in a housing project which has been
given infrastructure status, as proposed by Ministry of Housing & Urban
Affairs, under the same concessional rate.
(30)To tax time charter services at GST rate
of 5%, that is at the same rate as applicable to voyage charter or bare boat
charter, with the same conditions.
(31)To levy concessional GST @12% on the
services provided by way of construction, erection, commissioning,
installation, completion, fitting out, repair, maintenance, renovation, or
alteration of building used for providing (for instance, centralized cooking or
distributing) mid-day meal scheme by an entity registered under section 12AA of
IT Act.
(32)To exempt services provided by and to Federation
International de Football Association (FIFA) and its subsidiaries directly or
indirectly related to any of the events under FIFA U-20 World Cup in case the
said event is hosted by India.
(33)To exempt government’s share of profit
petroleum from GST and to clarify that cost petroleum is not taxable per se.
(B)
Rationalization of certain
exemption entries
(1)To provide in CGST rules that value of
exempt supply under sub-section (2) of section 17, shall not include the value
of deposits, loans or advances on which interest or discount is earned (This
will not apply to a banking company and a financial institution including a
non-banking financial company engaged in providing services by way of extending
deposits, loans or advances).
(2)To defer the liability to pay GST in case
of TDR against consideration in the form of construction service and on
construction service against consideration in the form of TDR to the time when
the possession or right in the property is transferred to the land owner by
entering into a conveyance deed or similar instrument (e.g. allotment letter).
No deferment in point of taxation in respect of cash component.
(3)To tax renting of immovable property by
government or local authority to a registered person under reverse Charge while
renting of immovable property by government or local authority to un-registered
person shall continue under forward charge
(4)To define insurance agent in the reverse
charge notification to have the same
meaning as assigned to it in clause (10) of section 2 of the Insurance Act,
1938, so that corporate agents get excluded from reverse charge.
(5)To insert a provision in GST Rules under section 15 of GST Act that the value of lottery
shall be 100/112 or 100/128 of the price of lottery ticket notified in the
Gazette (the same is currently notified in the rate notification).
(6)To add, in the GST rate schedule for goods
at 28%, actionable claim in the form of chance to win in betting and gambling
including horse racing.
(7)To insert in GST rules under section 15 of
GST Act,-
Notwithstanding
anything contained in this chapter, value of supply of Betting & Gambling
shall be 100 % of the face value of the bet or the amount paid into the
totalizator.
(C)
Clarifications
(1)To clarify that exemption
of Rs 1000/- per day or equivalent (declared tariff) is available in respect of
accommodation service in hostels.
(2)To clarify that fee paid
by litigants in the Consumer Disputes Commissions and any penalty imposed by
these Commissions, will not attract GST.
(3)To clarify that elephant/
camel joy rides are not classified as transportation services and attract GST @
18% with threshold exemption to small services providers.
(4)To clarify that leasing
or rental service, with or without operator, of goods, attracts same GST as
supply of like goods involving transfer of title in the said goods. Therefore,
the GST rate for the rental services of self-Propelled Access Equipment (Boom.
Scissors/Telehandlers) is 28%.
(5)To clarify that,-
1) Services provided by
senior doctors/consultants/technicians hired by the hospitals, whether
employees or not, are healthcare services which is exempt. 2) Hospitals also provide healthcare
services. The entire amount charged by them from the patients including the
retention money and the fee/payments made to the doctors etc., is towards the
healthcare services provided by the hospitals to the patients and is exempt.
3) Food supplied to the in-patients as advised by the
doctor/nutritionists is a part of composite supply of healthcare and not
separately taxable. Other supplies of food by a hospital to patients (not
admitted) or their attendants or visitors is taxable.
(6)
To clarify that services by way of,-
1.admission
to entertainment events or access to amusement facilities including casinos,
race-course
2.ancillary
services provided by casinos and race-course in relation to such admission.
3.services
given by race-course by way of totalisator (if given through some other person
or charged separately as fees for using totalisator for purpose of betting, are
taxable at 28%. Services given by race-course by way of license to bookmaker
which is not a service by way of betting and gambling, is taxable at 18%.
