GST rates on services finalised: Education, healthcare exempted


New Delhi, May 19: The GST (Goods and Services Tax) Council on Friday finalised tax rates for services.

jaitley gst meet

Addressing the media, Finance Minister Arun Jaitley said services to be taxed at 5, 12, 18, 28% while healthcare and education to remain exempted from GST.

Restaurants with turnover of Rs 50 lakh or below to face 5% tax under GST; non-AC restaurant at 12%, Jaitley said.

He said that AC restaurants and those with liquor licence to charge 18% GST; 5-star hotels to levy 28%; hotels with tariff of Rs 1,000-2,500 to pay 12% rate.

Telecom, financial services to attract GST of 18 per cent; 28% tax for race club, betting and cinema halls.

Five per cent GST to be levied on cab aggregators like Ola and Uber, Jaitley said.

Consumer staples including milk, fruits and vegetables, grain and cereals have been exempted. Sugar, tea, coffee and edible oil will be taxed the lowest rate of 5 percent.

The GST rates for all 1,211 items but six were finalised, yesterday, at the first day of the two-day meeting in Srinagar of the GST Council, headed by Union Finance Minister Arun Jaitley and comprising state representatives.

GST Council decided to exempt the daily-use commodities from the levy. Prices of foodgrains, especially wheat and rice, will come down as they will be exempt from GST.

Daily-use items like sugar, tea, coffee (barring instant coffee), edible oil and life-saving drugs will attract the lowest tax rate of 5 per cent, almost the same as current incidence. Milk and curd will continue to be exempt from taxation when the GST replaced current indirect taxes. ‘Mithai’ or sweets will attract 5 per cent levy.

The Common use products like hair oil, soaps and toothpaste will be charged with a single national sales tax or GST of 18 per cent instead of present 22-24 per cent tax incidence through a combination of central and state government levies.

The Council fitted all but six items in 5, 12, 18 or 28 per cent tax brackets. Seven per cent of the items fall under the exempt list while 14 per cent have been put in the lowest tax bracket of 5 per cent. Another 17 per cent items are in 12 per cent tax bracket, 43 per cent in 18 per cent tax slab and only 19 per
cent of goods fall in the top tax bracket of 28 per cent.

Cars, ACs, refrigerators and Aerated drinks will be in 28 per cent bracket. On top of the peak rate, small cars will attract a 1 per cent cess, mid-sized cars will attract 3 per cent and luxury cars 15 per cent.