Indian Finance Minister Arun Jaitley announced tax rates under the Goods and Services Tax (GST) regime. While announcing the slabs in Srinagar, Jaitley said the GST Council completely adopted rates for services.
“Four tax slabs for services-5%, 12%, 18% (standard rate), 28% (luxury services),” said Jaitley. He said the net effect of the GST will not be inflationary.
On Thursday, the Indian government, which aims to rollout GST from Jul 1, had finalised tax slabs for goods that ranged between 5-28%. The rates were fixed for more than 1200 items. Out of these, GST rates on all except six categories were decided.
Today, Jaitley listed out the tax slabs for services. Here’s a look for different categories
1. The 5% category:
5% service tax will be levied on Goods, Railways and Air Transport. Restaurants with Rs 50 lakh or below turnover can go for 5% composition
2. The 12% category:
Non-AC restaurants will fall under this category. Work contracts will also be taxed 12% under GST.
3. The 18% category:
AC restaurants with liquor licence will have 18% tax. Financial services and telecom will also fall under 18% category
4. The 28% category: Highest rate is applicable for luxury hotel services.
The 5-star hotels will levy 28% tax and even hotels and lodges with tariffs above Rs 5,000 will be taxed under 28% under GST. Gambling, Race Course, Cinema too fall under this category.
Healthcare and education services have been exempted from the GST