GST on entry to amusement parks, drinking water cut; heres what becomes cheaper post January 25

Key Highlights:

• Changes recommended by the GST Council will come into effect from January 25.
• A total of 49 goods and services have been exempted from the GST ambit.
• Camel and elephant joy rides will attract 18% GST.

From entry to amusement park rides to tailoring services and even confectionery sugar items are set to become cheaper starting next week.

Ahead of the Union Budget 2018, the GST Council moved to cut tax rates on 29 goods and on 54 services on Thursday.

The Union Finance Minister Arun Jaitley chaired the 25th meet of the GST Council in New Delhi.

“The Council has recommended many relief measures regarding GST rates on goods and services covering many sectors and commodities.  The Council has also recommended issuance of certain clarifications on issues relating to GST rates and taxability of certain goods and services,” a report by Ministry of Finance read.

Among the 29 goods that have received a rate cut were second-hand vehicles medium and large cars and SUVs from 28% to 18%. Items like confectionery sugar and bio-diesel have also received a tax cut.

Now as per the anti-profiteering law set up by the GST Council entailed that any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit should have been passed on to the recipient by way of commensurate reduction in prices.

These changes to the GST regime will come into effect from January 25.

Service tax on theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet has been slashed from 28% to 18%.

Tax on drinking water packed in 20 litres bottles cut to 12% from 18%.

GST on tailoring services has been reduced from 18% to 5%.

Even transportation of petroleum crude and petroleum products services has received a tax rate cut from 18% to 5%.

Manufacture of leather goods and footwear services will now attract a GST of 5%.

A total of 49 goods and services have been exempted from the GST ambit.

Among these include, services provided by and to Fédération Internationale de Football Association (FIFA) and its subsidiaries related to FIFA under 20 world cup, ‘in case the said event is hosted by India’.

“To exempt government’s share of profit petroleum from GST and to clarify that cost petroleum is not taxable per se,” the Ministry said.

Also services relating to admission to, or conduct of examination provided to all educational institutions have been exempted from the GST ambit.

“To enhance the limit to Rs 2 lakh against Sl. No. 36 of exemption notification No. 12/2017-C.T. (Rate) which exempts services of life insurance business provided under life micro insurance product approved by IRDAI upto maximum amount of cover of Rs 50,000,” the government said.

Certain clarifications were also put out by the Council like elephant and camel joy rides would attract 18% GST.

“To clarify that elephant/ camel joy rides are not classified as transportation services and attract GST at 18% with threshold exemption to small services providers,” the government said.

At its next meeting the Council is expected to deliberate and decide on easier compliance in the GST regime by way of simplifying the process of filing returns. Currently there are three forms that need to be filled in this process - GSTR1, GSTR2 and GSTR3.

The GST Council is set to meet after another 10 days ahead of the Union Budget 2018.

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