The GST Rates and Exemption for services have been revised w.e.f 18th July 2022.
The changes in brief are
All the changes in rate are effective from 18.07.2022
Works Contract
Notification 03/2022-CT dated 13.07.2022 notified the Central GST rate of composite supply of works contract @9% w.e.f.18.07.2022 from 6% CGST
1. All composite supply of works contracts supplied to Central Government , State Government, Union territory or a local authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of, –
- a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of1958);
- canal, dam or other irrigation works;
- pipeline, conduit or plant for (i)water supply (ii) water treatment, or(iii) sewerage treatment or disposal.
- a road, bridge, tunnel, or terminal for road transportation for use by general public;
- a civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana;
- a civil structure or any other original works pertaining to the “ln-situ redevelopment of existing slums using land as a resource, under the Housing for All (Urban)Mission/ Pradhan Mantri AwasYojana (Urban);]
- a civil structure or any other original works pertaining to the “Economically Weaker Section(EWS) houses” constructed under the Affordable Housing in partnership by State or Union territory or local authority or urban development authority under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana(Urban);
- a civil structure or any other original works pertaining to the “houses constructed or acquired under the Credit Linked Subsidy Scheme for Economically Weaker Section (EWS)/ Lower Income Group (LIG)/ Middle IncomeGroup-1 (MlG-1)/Middle IncomeGroup-2 (MlG-2)” under the Housing for All (Urban) Mission Pradhan Mantri Awas Yojana(Urban);]
- a pollution control or effluent treatment plant, except located as apart of a factory; or
- a structure meant for funeral, burial or cremation of deceased.
- a building owned by an entity registered under section 12AA [or12AB] of the Income Tax Act, 1961(43 of 1961), which is used for carrying out the activities of providing, centralised cooking or distribution, for mid-day meal sunder the mid-day meal scheme sponsored by the Central Government, State Government, Union territory or local authorities.
In all above cases GST rate was 12%, now will be 18% from 18.07.2022. (CGST +SGST)
2. Composite supply of works contract as defined in clause (119)of section 2 of the Central Goods and Services Tax Act, 2017,supplied by way of construction, erection, commissioning, or installation of original works pertaining to
(a) railways, including mono rail and metro;
(b) a single residential unit otherwise than as a part of a residential complex;
(c) low-cost houses up to a carpet area of 60 square metres per housing a housing project approved by competent authority empowered under the ‘Scheme of Affordable Housing in Partnership’ framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;
(d) low cost houses up to a carpet area of 60 square metres per house in a housing project approved by the competent authority under-
(1) the “Affordable Housing in Partnership” component of the Housing for All (Urban)Mission/Pradhan Mantri AwasYojana;
(2) any housing scheme of a State Government;
(da) low-cost houses up to a carpet area of 60 square metres per house in an affordable housing project which has been given infrastructure status vide notification of Government of India ,in Ministry of Finance, Department of Economic Affairs videF.No.13/6/2009-INF, dated the 30thMarch, 2017;
(e) post-harvest storage infrastructure for agricultural produce including a cold storage for such purposes; or
(f) Mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages
In all above cases presently GST rate is 12%, which will be 18% from 18.07.2022
3. Composite supply of works contract as defined in clause(119) of section 2 of the Central Goods and Services Tax Act, 2017
[other than that covered by items(i), (ia), (ib), (ic), (id), (ie) and (if) above] provided] to the Central Government, State Government, Union territory or a local authority] by way of construction, erection, commissioning ,installation, completion, fitting out, repair, maintenance, renovation, or alteration of
(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession;
(b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or(iii) an art or cultural establishment; or
(c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017.
Explanation. – For the purposes of this item, the term ‘business’ shall not include any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities
In all above cases presently GST rate is 12%, which will be 18% from 18.07.2022
4. Composite supply of works contract as defined in clause(119) of section 2 of the Central Goods and Services Tax Act, 2017 provided by a sub-contractor to the main contractor providing services specified in item (iii) or item (vi)above to the Central Government, State Government, Union territory or a local authority.
In all above cases presently GST rate is 12%, which will be 18% from 18.07.2022
Hotel accommodation having value of supply of a unit of accommodation upto Rs 1000/-
At present Hotel Room where Room charges is upto Rs 1000/- per day per unit is exempt under GST. Now from 18.07.2022, such accommodation will have to pay GST @ 12% (6% CGST and 6% SGST)
Transport of passengers, with or without accompanied belongings, by ropeways made taxable under GST.
From 18.07.2022, such services will be taxable at the rate of GST is 5% (2.5% CGST and 2.5% SGST), without ITC on Goods used in supply.
GTA allowed option to pay GST on own @5% without ITC credit and @12% with ITC from 18.07.2022
For exercising the above option GTA has to file form, (which is provided as annexure V of the Notification) before Jurisdictional GST authority on or before 15th March of precedential financial year and for current year(2022-23) on or before 16.08.2022
Renting of goods carriage where the cost of fuel is included option to avail ITC , by paying higher rate
Renting of goods carriage where the cost of fuel is included in the consideration charged from the service recipient. From 18.07.2022, the rate of GST will be 12% (6% CGST and 6% SGST), with ITC
Supporting services in transport
The entries in serial no 11 have been replaced. The support service in transport other than covered in serial no 9(iii) having HSN 9965 From 18.07.2022 to pay GST @ the rate of GST of 18% (9% CGST and 9% SGST), with ITC
Service provided a foreman of a chit fund in relation to chit
The Service provided a foreman of a chit fund in relation to chit has pay GST presently @ 12% with restriction of non- availment of ITC on Goods. The same entry is delated w.e.f. 18.07.2022. From 18.07.2022, the rate of GST will be 18% (9% CGST and 9% SGST), with ITC
Similarly – Leasing of aircrafts by an operator for operating scheduled air transport service or scheduled air cargo service by way of transaction covered by clause (f) paragraph 5 of Schedule II of the Central Good sand Services Act, 2017. This entry is delated w.e.f. 18.07.2022 From 18.07.2022, the rate of GST will be 18% (9% CGST and 9% SGST), with ITC
Job Work
(e) Processing of hides, skins and leather falling under Chapter 41in the First Schedule to the Customs Tariff Act, 1975 (51of 1975);.
(ea) manufacture of leather goods or foot wear falling under Chapter 42 or 64 in the First Schedule to the Customs Tariff Act,1975 (51of 1975) respectively;
(h) manufacture of clay bricks falling under tariff item 69010010 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975);
All above Job works are presently chargeable @ of 5% (2.5% CGST and 2.5% SGST) , as these entries will be deleted w.e.f. 18.07.2022. From 18.07.2022 to pay GST @ the rate of GST of 18% (9% CGST and 9% SGST)
In case of Medical Services , Normal Room having room charges more than Rs 5000/- per day shall be taxable
Services provided by a clinical establishment by way of providing room [other than Intensive Care Unit (ICU)/Critical Care Unit (CCU)/Intensive Cardiac Care Unit (ICCU)/Neo natal Intensive Care Unit (NICU)] having room charges exceeding Rs. 5000 per day to a person receiving health care services. From 18.07.2022, the rate of GST is 5% (2.5% CGST and 2.5% SGST), without ITC.
Services related to biomedical waste made Taxable
Services by way of treatment or disposal of biomedical waste or the processes incidental thereto by a common bio-medical waste treatment facility to a clinical establishment. From 18.07.2022, the rate of GST for these services will be 12% (6% CGST and 6% SGST), with ITC
Changes in Exemptions in Services w.e.f. 18.07.2022
Services by Department of post which are exempt are made taxable and some services are made exempt
Services by the Department of Posts are excluded from exemption w.e.f. 18.07.2022. Earlier only services by way of speed post, express parcel post, life insurance, and agency services provided to a person other than the Central Government, State Government, Union territory were excluded from the exemption. Even Services provided by Central Government, State Government, Union territory or a local authority where the consideration for such services does not exceed five thousand rupees is not applicable to Services of Department.
However new clause inserted to make the Services by the Department of Posts by way of post card, inland letter, book post and ordinary post (envelopes weighing less than 10 grams) exempt
Residential dwelling rented to a registered person shall be taxable
Presently renting services of residential dwelling for use as residence is exempt. However w.e.f. 18.07.2022 the residential dwelling is rented to a registered person is made taxable by excluding such services from Exemption.
Hotel accommodation Services upto Rs. 1000/- shall be taxable
Presently Hotel accommodation charges upto Rs 1000/- per day per unit is exempt. This exemption is withdrawn from 18.07.2022. The hotel accommodation charges from Rs 1 will be taxable under GST .
Certain Services by way of Transport of passengers or goods made taxable
Business class ticket in Transport of passengers, with or without accompanied belongings, embarking from or terminating in an airport located in the state of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in West Bengal made taxable w.e.f. 18.07.2022.
Transportation by rail or a vessel from one place in India to another of the railway equipment or materials exempt presently. From 18.07.2022 this exemption is withdrawn.
Exemption of Transport of goods, where consideration not exceed Rs 1500/- and goods, where consideration charged for transportation of all such goods for a single consignee does not exceed rupees 750/- are exempt presently. From 18.07.2022, these limits of exemption stand withdrawn.
Exemption for various food items for Warehousing restricted/withdrawn
Presently service by way of storage or warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, coffee and tea is exempt.
However, from 18.07.2022 warehousing / storage four items i.e. cereals, pulses, fruits and vegetables exempt. Warehousing/ Storage for remaining all items shall be taxable .
Service by RBI are made taxable
All the Service provided by Reserve Bank of India (RBI) are exempt at present, are made taxable from 18.07.2022, by withdrawing exemption for services by RBI.
Service by IRDA are made taxable
Exemption for Services provided by Insurance Regulator and Development Authority to insurers under the Insurance Regulatory and Development Authority of India Act, 1999 (41 of 1999) is withdrawn from 18.07.2022.
Services of SEBI are made taxable
Exemption for Services provided by the Securities and Exchange Board of India set up under the Securities and Exchange Board of India Act, 1992 (15 of 1992) by way of protecting the interests of investors in securities and to promote the development of, and to regulate, the securities market is withdrawn from 18.07.2022.
Services by Food Safety and Standards Authority of India (FSSAI) made taxable
Exemption for Services by way of licensing, registration and analysis or testing of food samples supplied by the Food Safety and Standards Authority of India (FSSAI) to Food Business Operators is withdrawn from 18.07.2022.
Services by GSTN to Central and State Govt. made taxable
Exemption for Services provided by the Goods and Services Tax Network to the Central Government or State Governments or Union territories for implementation of Goods and Services Tax is withdrawn from 18.07.2022.
Services by Tour operator to a foreign tourist partly in India and partly outside India are exempt with certain restriction
Tour operator service, which is performed partly in India and partly outside India, supplied by a tour operator to a foreign tourist, to the extent of the value of the tour operator service which is performed outside India with restriction is made exempt from 18.07.2022.
Restrictions- The value of the tour operator service performed outside India shall be such proportion of the total consideration charged for the entire tour which is equal to the proportion which the number of days for which the tour is performed outside India has to the total number of days comprising the tour, or 50% of the total consideration charged for the entire tour, whichever is less and in making the above calculations, any duration of time equal to or exceeding 12 hours shall be considered as one full day and any duration of time less than 12 hours shall be taken as half a day.
Fumigation Services in in a warehouse of agricultural produce are made taxable
Exemption for Services by way of fumigation in a warehouse of agricultural produce is withdrawn from 18.07.2022. This exemption which is under Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce {Serial no 54(h)} is also withdrawn.
Exemption for Services by way of slaughtering of animals is withdrawn from 18.07.2022
Certain Medical Services made taxable
Exemption for Services provided by the cord blood banks by way of preservation of stem cells or any other service in relation to such preservation is withdrawn from 18.07.2022
Exemption for the services provided by a clinical establishment by way of providing room [other than Intensive Care Unit (ICU)/Critical Care Unit (CCU)/Intensive Cardiac Care Unit (ICCU)/Neo natal Intensive Care Unit (NICU)] having room charges exceeding Rs. 5000 per day to a person receiving health care services are removed by adding proviso
Exemption for Services provided by operators of the common bio-medical waste treatment facility to a clinical establishment by way of treatment or disposal of bio-medical waste or the processes incidental thereto is from 18.07.2022.
Change in scope of exemption for training and coaching in recreational activity in art, or culture, sports
The wording for exemption is changed from 18.07.2022.
Services by way of training or coaching in-
(a) recreational activities relating to arts or culture, by an individual, or
(b) sports by charitable entities registered under Section 12AA or 12AB of the Income Tax Act.
Exemption for Services of admission to the events organised under FIFA U-17 Women’s World Cup 2020 is amended to extend the benefit for the event rescheduled
Services by way of right to admission to the events organised under FIFA U-17 Women’s World Cup 2020 whenever rescheduled.
Jul 18, 2022 - Blog - Team SSB
