With the Goods and Services Tax (GST) set for a July roll-out, Union Finance Minister Arun Jaitley on Friday said the new tax regime will be consumer-friendly besides being an efficient tax system. He also said that healthcare and education will remain exempted from the GST, while transport services will be taxed at 5 per cent.
Addressing reporters after attending a two-day meeting of the GST Council in Srinagar, Jaitley said rates of services will be in four slabs: 5, 12, 18 and 28 per cent. The rates are in alignment with those finalised for goods. With this, rates of all items except a handful including gold, have been decided ahead of the roll out of the GST.
“We are in state of readiness,” Jaitley said, confirming that July 1 will be the rollout date for GST. He also allayed concerns surrounding the new tax regime, saying rates have not been hiked and insisted that under the new system either present rates were maintained or they have been brought down.
Going into details, Jaitley said telecom and financial services will be taxed at a standard rate of 18 per cent while 28 per cent of tax will be levied for race club, betting and cinema halls. He said restaurants with turnover of Rs 50 lakh or below will face 5 per cent tax under the new tax regime while non-AC restaurants to be taxed at 12 per cent. In addition, five per cent GST will also be levied on cab aggregators like Ola and Uber.
Although the proposed rates for cinema halls in lower than 40 to 55 per cent as per current incidence, it may not yield a reduction in tariffs on cinema tickets due to states’ tight grip over local charges.
Meanwhile, Revenue Secretary Hasmukh Adhia said economy and business class air travel will attract 5 and 12 per cent GST, respectively. Talking about the e-commerce giants, he said players like Flipkart, Snapdeal will have to deduct 1 per cent TCS (tax collected at source) while making payments to suppliers.
Touted as the biggest reform in the country’s indirect tax structure, GST will introduce a single tax on supply of goods and services, right from the manufacturer to the consumer. Once GST comes into force, all central-and state-level taxes and levies on all goods and services will be absorbed within an integrated tax having two components: a central GST and a state GST.
The next meeting of the GST Council will be held on June 3.
With PTI inputs