Industry hopes for benefits on input tax credit under GST
- Author: Salvatore Jensen May 22, 2017,
May 22, 2017, 7:07
India has set rates for most goods and all services ahead of the much-anticipated July 1 launch of a unified sales tax regime that Prime Minister Narendra Modi's government touts as consumer-friendly and not inflationary.
Announcement by finance minister Arun Jately on Friday that horse-racing will be taxed at 28 per cent under the Goods and Services Tax (GST) has sent shock wave in the racing fraternity. Bindi, vermilion, glass bangles, handlooms, hearing aids and handmade musical instruments have also been exempt under GST.
GST rates for 1,211 goods and all services have been decided.
Council chose to levy 18 per cent GST on AC restaurants and those with liquor license while 5-star hotels have to pay 28 per cent. GST on work contract will be taxed at 12 per cent with credit inputs on some items like steel and cement. The council has already fixed GST rates for household items and manufactured goods. "The industry had proposed a rate of 5 per cent in our representations to the government, in order to revive a business which has been struggling from lack of fresh investments in new cinema screens and a significant increase in online piracy", Kapur said in a statement. Those with rates of 1,000 rupees to 2,500 rupees will be taxed at 12%, while those charging 2,500 rupees to 5,000 rupees will draw an 18% tax.
Only "a few things" remain up in the air, Jaitley said.
Motorcycles with more than 350 cc engines, personal aircraft and yachts will attract a 28 tax in addition to cess 3 per cent while mid-segment and high-end luxury cars will call for a cess of 15 per cent.
Jaitley said the luxury category of 28 per cent includes five star hotels, gambling, race clubs, betting and cinemas.
Sources say that most of the Tamil films have enjoyed the tax exemption provided by Tamil Nadu but from July 1, things will be different and producers have to adapt themselves to survive in the industry.
"Commitment to affordable health reenforced; hope benefits are passed on to patients Healthcare, exempted from GST", tweeted Bhupendra Singh, chairman of Indian drug price regulator NPPA.
"The GST will bring major changes in fiscal and political side of India's federal structure because of which coercive federalism will pave way for cooperative and competitive federalism", Dr Drabu said while speaking at a Roundtable of the Finance Ministers organised by the financial newspaper The Mint at Royal Springs Golf Course here today.
Total 83 services have been exempted under GST including education, healthcare, service of access to a road or a bridge on payment of toll charges, transmission or distribution of electricity by an electricity transmission/distribution utility, services provided to United Nations or worldwide organisation and consular services provided to foreign diplomatic mission, the details on service tax list for GST released by CBEC showed. Speaking about the newly implemented tax, Vinod Dasari, President, SIAM said that the rates are as per the expectations of the industry and nearly all segments of the industry have benefitted by way of a reduced overall tax burden in varying degree. That takes the total number of services out of GST to 83.