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GST Update on Education and health services exempt from GST

GST Update on Education and health services exempt from GST

GST has been identified as one of the most important indirect tax reform after independence . The government has passed the four GST bills on 29th March’2017 in the Lok Sabha which clearly indicates that government is all set to implement GST with effect from July 1, 2017. The discussion on the same is going on in Rajya Sabha. But the approval from Raj Sabha is not mandatory since it is money bill only.

The recent update by Government about GST is that Education, Health Care and Pilgrimages will be exempted from GST. The Government has recommended to the GST council that services presently enjoying exemption should also remain exempt in GST regime. This is to protect the common man from heavy taxes in initial stage of implementation of GST.

Also there would be no levy of GST on services rendered by the government, Reserve Bank of India, public conveniences, educational institution, services relating to agriculture, transmission or distribution of electricity, renting of residential dwelling for use as a residence, burial, healthcare, specified schemes of general insurance etc. Moreover, Crude oil, petrol, diesel, aviation turbine fuel (ATF) and natural gas being kept out of GST net for the time being by continuing with existing taxes of excise and VAT.

Currently the main service tax rate will be standard rate of 18 percent. Hence, the rate of tax is going to increase for service sector from 15% to 18%. There are many services like transportation, short term accommodation, restaurant, Rent-a cab, tour operator etc. which are enjoying abatement can be availed in service tax. But there is no specific provision in GST law for abatements. Hence, they should be fitted in rates close to the present incidence so that they should not be expensive for the customer after GST.
The GST Council has approved a four-rate tax structure of 5, 12, 18 and 28 percent. Also, there will be cess applicable. Also, there will be separate for Gold and jewellery items.
 
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