23rd GST Council Meeting - GST Rate Changes for Services

In the 23rd GST Council Meeting, GST rate reduction for various goods and services was announced. A major highlight of the 23rd GST Council Meeting was the reduction of GST rates for various goods listed under the 28% slab. In addition to the changes in GST rate for goods, the GST rate for services have also been reduced as follows:

Want to know about other major changes announced at the 23rd GST Council Meeting?

Details of GST Return Due Date Changes announced in the 23rd GST Council Meeting Details of GST Rate Changes for Goods announced in the 23rd GST Council Meeting Details of GST Composition Scheme Changes announced in the 23rd GST Council Meeting

GST Registration for Service Providers through E-Commerce

In the 22nd GST Council Meeting, it was decided to exempt those service providers whose annual aggregate turnover is less than Rs. 20 lakhs (Rs. 10 laths in special category states except for Jammu and Kashmir) from

obtaining GST registration even if they are mating inter-state taxable supplies of services. As a further measure towards taxpayer facilitation, it has been decided in the 23rd GST Council Meeting to exempt service providers providing services through an e-commerce platform from obtaining compulsory GST registration provided their aggregate turnover does not exceed Rs.20 lakhs. Thus all service providers, whether supplying intra-state, inter-State or through an e-commerce operator, will be exempt from obtaining GST registration if the average annual turnover does not exceed Rs. 20 lakhs (Rs 10 laths in special category states except for Jammu & Kashmir.

Claim Input Tax Credit for Export of Services to Nepal & Bhutan

Exports of services to Nepal and Bhutan have already been exempted from GST. It has now been decided that such exporters will also be eligible for claiming Input Tax Credit in respect of goods or services used for effecting such exempt supply of services to Nepal and Bhutan.

GST Rate for Services Reduced for Services

In the 23rd GST Council Meeting, the GST rate for various services was reduced as follows:

Restaurants

All stand-alone restaurants irrespective of air-conditioning or otherwise will now attract 5% without input tax credit. Also, restaurants in hotel premises having room tariff of less than Rs 7500 per unit per day will attract GST of 5% without input tax credit. Food parcels (or takeaways) will also attract 5% GST without input tax credit. Hence, home delivery order and eating out at restaurants will become cheaper for all persons.

High-End Hotel Restaurants

Restaurants in hotel premises having room tariff of Rs 7500 and above per unit per day (even for a single room) will attract GST of 18% with full input tax credit. It is important to note the word (even for a single room) in this circular. 18% GST rate will be applicable for restaurants, the moment a hotel has a tariff of over Rs.7500 on its rate card.

Outdoor Catering

Outdoor catering will be taxed at 18% GST rate with full input tax credit.

Job Work

GST rate on job work services in relation to manufacture of those handicraft goods in respect of which the casual taxable person has been exempted from obtaining registration, to be reduced to 5% with full input tax credit.

Tickets to Protected Monuments

GST on services by way of admission to "protected monuments will be exempted from GST.

Transfer of Intellectual Property - Other Than Software

Permanent transfer of Intellectual Property other than Information Technology software will attract GST at the rate of 12%.

Transfer of Intellectual Property - Software

Permanent transfer of Intellectual Property in respect of Information Technology software will attract GST at the rate of 18%.

Services Provided to Government under an Insurance Scheme

Services provided to the Central Government, State Government, Union territory under any insurance scheme for which total premium is paid by the Central Government, State Government, Union territory are exempt from GST.

Services Provided by State Government by way of General Insurance

Services provided by State Government by way of general insurance (managed by the government) to employees of the State government/ Police personnel, employees of Electricity Department or students are exempt.

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Frequently Asked Questions

Common questions about GST Rate Changes for Services.

The 23rd GST Council Meeting announced a reduction in GST rates for various services. Stand-alone restaurants and those in hotel premises with room tariffs below Rs 7,500 will be charged 5% GST without input tax credit. Restaurants in high-end hotels (room tariff of Rs 7,500 and above) and outdoor catering services will attract 18% GST with input tax credit. The GST rate on job work services for manufacturing certain handicraft goods has been reduced to 5% with input tax credit.

The GST rate changes will make eating out and ordering food from restaurants more affordable for consumers. All stand-alone restaurants, irrespective of air conditioning, and restaurants in hotel premises with room tariffs below Rs 7,500 will charge 5% GST without input tax credit. Food parcels or takeaways will also attract 5% GST without input tax credit, making home delivery orders cheaper.

The permanent transfer of intellectual property other than Information Technology software will attract a GST rate of 12%. However, the permanent transfer of intellectual property in respect of Information Technology software will be taxed at 18% GST.

Services provided to the Central Government, State Government, or Union Territory under any insurance scheme where the total premium is paid by the respective government will be exempt from GST.

Yes, the 23rd GST Council Meeting provided relief for service providers offering services through e-commerce platforms. If their aggregate turnover does not exceed Rs. 20 lakhs (Rs. 10 lakhs in special category states except Jammu & Kashmir), they will be exempted from obtaining compulsory GST registration.

Services provided by way of admission to "protected monuments" will be exempted from GST.

Yes, exporters of services to Nepal and Bhutan, which were already exempted from GST, will now be eligible to claim input tax credit for goods or services used in providing such exempt services.

The GST rate on job work services in relation to the manufacture of handicraft goods, for which casual taxable persons have been exempted from obtaining registration, has been reduced to 5% with full input tax credit.

Services provided by state governments by way of general insurance (managed by the government) to their employees, police personnel, employees of electricity departments, or students will be exempt from GST.

Yes, restaurants in hotel premises with room tariffs of Rs 7,500 and above (even for a single room) will attract 18% GST with full input tax credit, making dining at high-end hotel restaurants more expensive for consumers.