GST Rate Changes for Services

GST Registration for Service Providers through E-Commerce

In the 22nd GST Council Meeting, it was decided to exempt those service providers whose annual aggregate turnover is less than Rs. 20 lakhs (Rs. 10 laths in special category states except for Jammu and Kashmir) from obtaining GST registration even if they are mating inter-state taxable supplies of services.

As a further measure towards taxpayer facilitation, it has been decided in the 23rd GST Council Meeting to exempt service providers providing services through an e-commerce platform from obtaining compulsory GST registration provided their aggregate turnover does not exceed Rs.20 lakhs. Thus all service providers, whether supplying intra-state, inter-State or through an e-commerce operator, will be exempt from obtaining GST registration if the average annual turnover does not exceed Rs. 20 lakhs (Rs 10 lakhs in special category states except for Jammu & Kashmir.

Claim Input Tax Credit for Export of Services to Nepal & Bhutan

Exports of services to Nepal and Bhutan have already been exempted from GST. It has now been decided that such exporters will also be eligible for claiming Input Tax Credit in respect of goods or services used for effecting such exempt supply of services to Nepal and Bhutan.

GST Rate for Services Reduced for Services

In the 23rd GST Council Meeting, the GST rate for various services was reduced as follows:

Restaurants

All stand-alone restaurants irrespective of air-conditioning or otherwise will now attract 5% without input tax credit. Also, restaurants in hotel premises having room tariff of less than Rs 7500 per unit per day will attract GST of 5% without input tax credit.

Food parcels (or takeaways) will also attract 5% GST without input tax credit. Hence, home delivery order and eating out at restaurants will become cheaper for all persons.

High-End Hotel Restaurants

Restaurants in hotel premises having room tariff of Rs 7500 and above per unit per day (even for a single room) will attract GST of 18% with full input tax credit. It is important to note the word (even for a single room) in this circular. 18% GST rate will be applicable for restaurants, the moment a hotel has a tariff of over Rs.7500 on its rate card.

Outdoor Catering

Outdoor catering will be taxed at 18% GST rate with full input tax credit.

Job Work

GST rate on job work services in relation to manufacture of those handicraft goods in respect of which the casual taxable person has been exempted from obtaining registration, to be reduced to 5% with full input tax credit.

Tickets to Protected Monuments

GST on services by way of admission to “protected monuments will be exempted from GST.

Transfer of Intellectual Property – Other Than Software

Permanent transfer of Intellectual Property other than Information Technology software will attract GST at the rate of 12%.

Transfer of Intellectual Property – Software

Permanent transfer of Intellectual Property in respect of Information Technology software will attract GST at the rate of 18%.

Services Provided to Government under an Insurance Scheme

Services provided to the Central Government, State Government, Union territory under any insurance scheme for which total premium is paid by the Central Government, State Government, Union territory are exempt from GST.

Services Provided by State Government by way of General Insurance

Services provided by State Government by way of general insurance (managed by the government) to employees of the State government/ Police personnel, employees of Electricity Department or students are exempt.

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