GST Tip – 276

As per Notification No. 11/2017-Central Tax (Rate),  for services related to Services furnished by business, employers and professional organizations Services, Services furnished by trade unions & Services furnished by other membership organizations falling under HSN/SAC 9995 the Central Tax Rate is 9%

GST Tip – 275

As per Notification No. 11/2017-Central Tax (Rate), services like Recreational, cultural and sporting services are taxed at rate of 9% for the central tax for admission or access to circus, Indian classical dance including folk dance, theatrical performance, drama or movie tickets less than Rs 100 and rest of the recreational & sporting services are taxed at 14%. These services are falling under HSN / SAC 9996

FM: Organized traders and unorganized sellers in Textile Sector have not been affected by the Goods and Services Tax (GST).

In reply to a Starred Question in Rajya Sabha today, the Union Minister for Finance, Defence and Corporate Affairs, Shri Arun Jaitley said that the organized traders and unorganized sellers in Textile Sector have not been affected by the Goods and Services Tax (GST).

 

Shri Jaitley said that the GST rate structure for the textile sector was discussed in detail in the GST Council Meeting held on 3rd June, 2017, wherein the Council recommended the detailed rate structure for the textile sector. Accordingly, the GST rates for the textile sector have been notified as under:

 

S. No. Type of fibre/filament GST rate
Fibre Yarn Fabrics* Garments and made ups**
1.

 

Silk Nil 5% 5% 5% / 12%
2. Wool Nil 5% 5% 5% / 12%
3. Cotton 5% 5% 5% 5% / 12%
4. Other vegetable fibres Nil / 5% 5% 5% 5% / 12%
5. Manmade fibres / filaments 18% 18% 5% 5% / 12%

 

* – 5% GST rate with no refund of unutilized input tax credit.

** – (i) 5% GST rate for garments / made ups of sale value not exceeding Rs.1000 per piece.

(ii) 12% GST rate for garments / made ups of sale value exceeding Rs.1000 per piece.

 

Thus, the GST rate structure for the Textiles Sector enables ease of classification and determination of rate.

 

The main demand of the textile traders is not to put any tax on fabrics. However, the same cannot be accepted because of the following reasons:

 

  • Nil GST on fabrics will break the input tax credit chain and then the garments / made ups manufacturers will not be able to get the credit of tax on previous stages
  • Nil GST on fabrics will result in zero rating of imported fabrics, while domestic fabrics will continue to bear the burden of input taxes.
  • Generally, the GST rates are equal or lower than the pre-GST tax incidence. And therefore, the price of fabrics is not likely to go up.

 

It is not correct to say that textiles sector was never taxed in independent India. In fact, during 2003-04, the entire textiles sector was subjected to central excise duty. Necessary steps have been taken to facilitate taxpayers to take GST registration. GST Sewa Kendras have been set-up in various centres to handhold the taxpayers and to provide all necessary guidance regarding GST compliance.

 

This was stated by Shri Arun Jaitley, Union Minister for Finance, Defence and Corporate Affairs in a written reply to a Starred Question in Rajya Sabha today.

 

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DSM/SBS/KA

 
(Release ID :168539)

Source – http://pib.nic.in/mobile/mbErel.aspx?relid=168539

 

Government clarifies that accommodation in any hotel, including 5-star hotels, having a declared tariff of a unit of accommodation of less than INR 7500 per unit per day, will attract GST @ 18% ; Star rating of hotels is, therefore, irrelevant for determining the applicable rate of GST.

Reports have been received expressing doubts whether 5-star Hotels are liable to pay GST @ 28% irrespective of the declared tariff of a unit of accommodation.

In this context, it is hereby clarified that accommodation in any hotel, including 5-star hotels, having a declared tariff of a unit of accommodation of less than INR 7500 per unit per day, will attract GST @ 18%. Star rating of hotels is, therefore, irrelevant for determining the applicable rate of GST.

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DSM/SBS/KA
(Release ID :168501)

Source – http://pib.nic.in/mobile/mbErel.aspx?relid=168501

GST : to migrate from a complicated and multi tax system to a simpler tax system

The tax rates on goods and services have been fixed taking into consideration, inter alia, the total indirect tax incidence in pre- GST regime, including cascading of taxes. The GST rates so notified are lower than the pre-GST tax incidence on most of the items of mass consumption, such as cereals, pulses, milk, tea, vegetable edible oils, sugar, toothpaste, hair oil, soap, footwear, Childrens’ picture, drawing or coloring books, etc. In addition, the objective of GST was to migrate from a complicated and multi tax system to a simpler tax system. The GST thus, is a much simpler tax regime as compared to tax regime it has replaced. In fact, GST has replaced several taxes which were being levied and collected by the Centre, including Central Excise Duty; Duties of Excise (Medicinal and Toilet Preparations); Additional Duties of Excise (Goods of Special Importance); Additional Duties of Excise (Textiles and Textile Products); Additional Duties of Customs (commonly known as CVD); Special Additional Duty of Customs (SAD); and Service Tax. In addition, a number of State taxes have also been subsumed in GST, including State VAT; Central Sales Tax; Purchase Tax; Luxury Tax; Entry Tax (All forms); Entertainment Tax (except those levied by the local bodies); Taxes on advertisements; Taxes on lotteries, betting and gambling. Besides, a number of cesses have also been abolished vide the Taxation Laws Amendment Act, 2017. GST has only five rational rates (0%, 5%, 12%, 18%, and 28%) as against multiple excise duty rates, rate of cesses and surcharges and multiple rates of VAT (varying across the states in many cases). Therefore, overall the GST is much simpler to earlier tax regime it has replaced.

This was stated by Shri Santosh Kumar Gangwar, Minister of State for Finance in written reply to a question in Rajya Sabha today.

****DSM/SBS/KA
(Release ID :168567)

Source – http://pib.nic.in/mobile/mbErel.aspx?relid=168567

(18-July, 2017 17:43 IST ) GST rates so notified are lower than the pre-GST tax incidence on most of the items of mass consumption such as cereals, pulses, milk, tea, vegetable edible oils, sugar, toothpaste, hair oil, soap, footwear, Childrens’ picture, drawing or colouring books, etc.

Specified assistive devices, rehabilitation aids and other goods for differently abled people attract the lowest (non-Nil) GST rate of 5%. Most of the inputs for such goods attract 18% GST. Nil GST on any goods zero rates inputs, while domestic goods continue to bear input taxes. Further, for any goods which attract GST rate (other than Nil) which is lower than the inputs for such goods, the Central Goods and Services Tax Act, 2017 (GST law) provides for refund of accumulated input tax credit. Thus, 5% GST on assistive devices, rehabilitation aids, their manufacturers would enable their domestic manufacturers to claim refund of any accumulated Input Tax Credit. That being so, the 5% concessional GST rate on these devices/equipment would result in reduction of the cost of domestically manufactured goods, as compared to the pre-GST regime.

As against that, if these devices/equipments are exempted from GST, then while imports of such devices/equipments would be zero rated, domestically manufactured such devices/equipments will continue to bear the burden of input taxes, increasing their cost and resulting in negative protection for the domestic value addition.

This was stated by Shri Santosh Kumar Gangwar, Minister of State for Finance in written reply to a question in Rajya Sabha today.

****DSM/SBS/KA
(Release ID :168575)

Source – http://pib.nic.in/mobile/mbErel.aspx?relid=168575

GST exemption for products used by differently abled people

Specified assistive devices, rehabilitation aids and other goods for differently abled people attract the lowest (non-Nil) GST rate of 5%. Most of the inputs for such goods attract 18% GST. Nil GST on any goods zero rates inputs, while domestic goods continue to bear input taxes. Further, for any goods which attract GST rate (other than Nil) which is lower than the inputs for such goods, the Central Goods and Services Tax Act, 2017 (GST law) provides for refund of accumulated input tax credit. Thus, 5% GST on assistive devices, rehabilitation aids, their manufacturers would enable their domestic manufacturers to claim refund of any accumulated Input Tax Credit. That being so, the 5% concessional GST rate on these devices/equipment would result in reduction of the cost of domestically manufactured goods, as compared to the pre-GST regime.

As against that, if these devices/equipments are exempted from GST, then while imports of such devices/equipments would be zero rated, domestically manufactured such devices/equipments will continue to bear the burden of input taxes, increasing their cost and resulting in negative protection for the domestic value addition.

This was stated by Shri Santosh Kumar Gangwar, Minister of State for Finance in written reply to a question in Rajya Sabha today.

****DSM/SBS/KA
(Release ID :168575)