Transport to be taxed at 5%; restaurants with turnover of Rs 50 lakh or below will face 5% tax
SRINAGAR: Government of India has finalised four tax rates that will apply to services including telecoms, insurance, hotels and restaurants under a new sales tax which should be rolled out on July 1, India’s Finance Minister Arun Jaitley said on Friday.
The tax rates will be 5%, 12%, 18% and 28% – in line with those applying to goods. Jaitley added that health care and educa-tion would remain exempted under the landmark GST.
Telecoms and financial services will be taxed at a standard rate of 18% while transport services will be taxed at 5%, Jaitley told reporters after a meeting of the GST Council in Srinagar. The finance minister said that various categorisations were made under GST based on the nature of services.
“Transport services will be taxed at 5 per cent, restaurants with turnover of Rs 50 lakh or below will face a 5 per cent tax under GST, and non-AC restaurants at 12 per cent,” he said adding AC restaurants and those with liquor licences will charge GST at 18 per cent, 5-star hotels at 28 per cent; and hotels with tariff of Rs 1,000-2,500 and 12 per cent rate.
The GST Council would again meet on June 3.
Jaitley said, “Telecom and financial services will attract GST at 18 per cent, and race clubs, betting and cinema halls at 28% per cent.” He said the GST Bill was going to be consumer-friendly and most of the service tax exemptions had been grandfathered and those would continue. “GST, besides being a more efficient tax, is also going to be consumer-friendly,” Jaitley said
There will be no new addition of services in the exempted list under GST.