GST Impact on Service Providers, GST Rates on Various Services

GST Impact on Service Providers, GST Rates on Services with Comparison: Under GST most of services will be taxed at a rate of 18%, higher than the 15% levied earlier. A fall in demand for discretionary services related to entertainment and recreation is anticipated due to the rise in prices.

Secondly, the cost of compliance could see a sharp rise. The concept of centralized registration no longer exists. Now a service provider will have to get state-wise registration done for each state it operates in. Those having a pan-India presence will be hit the most. Here you may also check provisions for GST Rates on Website Advertisement, Google Adsense Payment etc..

GST Impact on Service Providers, GST on advertising agency

As per the model GST law tabled by the Government, expenses incurred on advertising will be available for input credit on taxes paid on advertisements, however, under current taxation laws, advertising spend is treated as manufacturing expense and no input credit on sales tax and VAT is available. On the other hand, the industry is unanimously happy that it will bring transparency in the system which will benefit everybody.

(a) Present destination based to proposed consumption based levy: Presently, service tax is levied mainly at the origin and is a destination based levy, the burden of which is borne by the end customer. Under GST generally they would be taxed in the same way except that the place of supply would have to be confirmed. Tax would flow to the place of consumption.

(b) Service tax-SGST levied by States: Under GST law, the service tax would be levied not just by Centre but also by the States which would be empowered to levy SGST by amendment to the Constitution of India.

(c) Taxes received by consuming State: If services are rendered from one State to another, then tax would ultimately go to the consuming State.

(d) Increased set off with VAT: The VAT credit for goods which was not available to the service provider would be available under GST.

AC Services, a tax free, but other taxable

  • If the person rented the house, then no tax, but the same house if you paid for commercial use then 18% will be taxed.
  • There is no tax on the museum, National Park, Ju, Tiger, Reserve tickets, but 28% tax will be charged on tickets for places such as Theme Park, Water Park and Joy Ride. It is considered luxury in GST.
  • Circuit, dance, theater concert ticket is upto 250 and there is no tax. But more than 18% tax will be required on the tickets.

Health Care Services are Cheaper 

Name of Service  Current(%) GST(%) Difference(%)
Sanitary napkin 21.37 12 -8.63
Stent 5.5 5 -5
Insulin 11.83 5 -6.83
Ayurvedic Greek-Siddha Homyo 12.36 5 -6.64
Eyeglasses 18.68 12 -5.32
चश्मे के लेंस (Glasses lenses) 11.83 12 +0.17
Dental wax 18.68 18 -0.68

Phone bill, financial service expensive

Service Old GST Difference
Phone Bill 15 18 +3
Insurance premium 15 18 +3
Financial Services 15 18 +3
Courier Agency 15 18 +3

Tour and Travel: Cheap for the common people, expensive for the business class

Service Old GST Difference
Non AC Rail Ticket 0 0 0
AC Rail Ticket 4.5 5 +0.5
Carriage handling by Train 4.5 5 +0.5
Carriage handling by Truck 4.5 5 +0.5
Tour Operator 9 5 -4
Cab Service 6 5 -1
Air Economy 6 5 -1
Air Business 9 12 +3

Restaurants – Real State Service Expensive

Name of Service Old GST Difference
Ropeway, cable car 15 18 +3
Real estate 5.5 12 +6.5
Restaurant 11 12-28 +1-17

Recommended Articles

  • List of all Services at 28% GST Rate
  • List of all Services at 18% GST Rate
  • GST Rate in India, GST Rates in India 2017
  • List of all Services at 12% GST Rate
  • List of all Services Taxable in GST
  • List of all Services Exempted in GST
  • List of all Services at 5% GST Rate

GST Rates 2017 by item wise at One Place in PDF & Articles Format

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