Arjuna (Fictional Character): Krishna, rainy season is on somewhere shortage and somewhere water is clogged in line to it some service provider are worried while some are happy hence who are happy and which services have been exempted w.e.f 27th July 2018, as per recent amendments in GST?
Krishna (Fictional Character): Arjuna, like heavy showers these taxpayers are enjoying and following, are the few major services exempted-
i. Services by an old age home run by State/Central Government or by a body registered under 12AA of Income Tax Act) to its residents (aged 60 years or more) against consideration upto Rupees 25000 per month per member where Consideration is inclusive of charges for boarding, lodging and maintenance.
ii. Consideration in the form of membership fee up to an amount of Rs.1000 per member per year received by an unincorporated body or a non-profit entity which provides services like promotion of trade, commerce, industry, agriculture, art, science, culture, sports, education, social welfare, protection of environment etc.
iii. The specified services of construction, installation, commissioning etc. undertaken by electricity distribution utilities for extending electricity distribution network upto the tube well of the farmer/agriculturalist for agricultural use.
iv. Warehousing of Minor forest produce have been exempted.
Arjuna: Krishna,is there any reduction in tax rate for supply of services?
Krishna: Arjuna, like moderate rainfall, these taxpayer are happy and following are the few major services for which tax rates have been reduced-
i. As a green initiative, GST on supply of e-books has been reduced from 18 to 5%.
ii. GST rate for composite supply of multimodal transportation under forward charge has been reduced from 18 to 12%.
Multimodal transportation means transporting goods under single contract but using multiple means of transportation (like rail, air, sea etc.) by principal as specified.
iii. GST on Supply of food and drinks etc. to institutions like educational, office, factory, hospital, industrial units on contractual basis has been reduced from 18 to 5% without the benefit of ITC.
iv. The scope of outdoor catering is now restricted to supplies in case of outdoor/indoor functions that are event based and occasional in nature. For example, providing food, beverages in a marriage function would be treated as Outdoor catering and taxed @18% but providing daily food to a company for its employees on a contract basis is not an outdoor catering hence taxed @5% without the benefit of ITC.
v. Supply, of goods, being food or any other article for human consumption or any drink, by the Indian Railways or Indian Railways, Catering and Tourism Corporation Ltd. or their licensees, whether in trains or at platforms is now taxed at 5% without the benefit of ITC.
Arjuna: Krishna are there any other important amendments?
Krishna: Arjuna, like light showers in some areas, the other changes introduced are-
i. Earlier in the Hotel industry for calculating GST rate slabs on accommodation service Declared tariff value would be considered but now the rate of tax would be decided on the basis of Value of supply instead of declared tariff.
ii. On inward supplies from 1st August 2018 fabric, Textile units etc. will get ITC and refund if any under inverted duty structure.
Arjuna: Krishna what people should take from this?
Krishna: In rainy season one should take care of his health and use umbrella likewise a taxpayer should update knowledge, as the knowledge is the umbrella which can save the taxpayer from heavy taxable rains. The taxation of services is getting complex like a road full of water, mud, potholes and getting slippery in GST day by day. The taxpayer should carefully put his feet on wet ways of taxation. A thorough study of the amendments and thereafter implement it is the key to survives in this floods of GST changes.