GST Rates – Services

GST council also imposed GST on Services with the same 4 - tier tax structure as of goods. GST rates on services comprising of 5%, 12%, 18% and 28% come with various pros and cons for the consumers.

However, government has exempted healthcare and educational services from the purview of the GST.

The Goods and Services Tax council has passed the rate slabs at NIL, 5%, 12%, 18%, 28%. Some of the services categorized under different slabs are mentioned below :

Tier – I  (5% Tax Slab) : Railways-Transportation of goods, passengers Goods transported in a vessel from outside India Renting a motor cab without fuel cost Transport services in AC contract/stage or radio taxi Transport by air Tour operator services Leasing of aircrafts Working for printing of newspapers

Tier – II (12% Tax Slab) : Rail transportation of goods in containers from a third party other than Indian Railways Air travel excluding economy Food /drinks at restaurants without AC/heating or liquor license Renting of accommodation for more than Rs.1000 and less than Rs.2500 per day Chit fund services by foremen Tour operator services Leasing of aircrafts Construction of building for the purpose of sale Intellectual Property rights on a temporary basis

Tier – III ( 18% Tax Slab) : Food/drinks at restaurants with liquor license Food /drinks at restaurants with AC/heating Outdoor catering Renting for accommodation for more than Rs.2500 but less than Rs.5000 per day Supply of food, shamiyana, and party arrangement Circus, Indian classical, folk, theatre, drama Supply of works contract Movie Tickets over Rs. 100 Hotel accommodation for transaction value per unit per day being with Rs 2,500-7,500 tariff

Tier – IV (28% Tax Slab) : Entertainment events-amusement facility, water parks, films, theme parks, joy rides, merry-go-round, race course, go-carting, casinos, ballet, sporting events like IPL Race club services Gambling Food/drinks at AC 5-star hotels Accommodation in 5-star hotels or above Hotel accommodation for transaction value per unit per day being Rs. 7501 or more

• GST rate on works contract services: First of all one needs to understand whether works contract is a service or not. In GST, composite supply of works contract has been classified as a service.

  Accordingly, the rate of GST on services, in this case, would be as follows :

  • 12% - Construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly. [The value of land is included in the amount charged from the service recipient]
  • 18% - Other works Contract

  Clarifications : If works contract is executed in construction of complex or building where the intention is to sale to a buyer then rate of tax will be 12% else 18%.

• GST rate on consultancy services : Consultancy services attracts 18% of GST Rate. Consultancy can be of any nature related to healthcare, finance, investments etc. Though there are five slab rates, but consultancy services falls under 18% slab only.

  Other GST slabs are 0%, 5%, 12%, 18% and 28%. These slabs are assigned on the basis of basic necessity and economic activity.

  All those services which were attracting Service Tax at the rate of 15% now falls under the slab of 18% under GST regime.

• GST rate on professional services :

  Nature of services	GST rate for services
  Services provided by legal professionals i.e. advocates – [Service provided in relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority.]	18% Slab
  Services provided by chartered accountants, company secretaries and cost accountants [Services in nature of accounting, auditing, bookkeeping, tax return preparation and filing, consultancy and representational services.]
  Services provided by doctors and dentists [Services for appearance enhancement i.e. hair transplant, cosmetic and plastic surgeries are liable to be taxed and only these services are included and all other services provided by doctors and dentist are covered under health care services and are exempt from GST levy]
  Services provided by architects and interior decorators/ designers [ Services of nature Interior decoration/ design service]
  Services provided engineers
  Teachers [Profession includes vocation. So any services provided by private teachers/ tutors who conduct coaching classes or run coaching centers are covered under professional services and the services they render to students can be termed as education services liable to be taxed]
  Designers (fashion, industrial and specialty)
  Film artists

• GST rate on courier services : Courier services includes transportation, collection and delivery services. This includes letters , parcels etc movement form one or model of transportation.

  However GST on Postal services is excluded. GST on courier services is applicable as it falls under the definition of Supply.

  Below is the GST rate on courier services :

  Nature of Service	GST rates on services
  Courier Services	18% Slab

• GST rate for educational services : Though blindly any services provided by an educational institution is exempted from levy of taxes, there are certain services which when provided or consumed by educational institutions are liable to be taxed.

  Below is the GST rate for educational services which are taxable under GST :

  Nature of Service	GST rates on services
  Training services provided by commercial coaching entities	18% Slab
  Educational events organised by a foreign-based entity in India and the service recipient being commerce, industry or any other business or profession.

• GST rate for IT services

  Nature of Service	GST rates on services
  Information Technology Services : Management consulting and management services including financial, strategic, human resources, marketing, operations and supply chain management. Business consulting services including pubic relations services Information technology (IT) consulting and support services Information technology (IT) design and development services Hosting and information technology (IT) infrastructure provisioning services IT infrastructure and network management services Other information technology services	18% Slab
  Internet Telecommunications Services : On-line text based information such as online books, newspapers, periodicals, directories etc On-line audio/ video content Other on-line contents
  Maintenance, Repair and Installation Services : Maintenance and repair services of office and accounting machinery/computers and peripherals/telecommunication equipment and apparatus. Installation services of office and accounting machinery and computers/ radio, television and communications equipment and apparatus.
  Other types of IT services : Research and development originals in computer-related sciences Telephone-based support services Other information services n.e.c.