23 Sep 2019Posted By: Mudit Handa


37th GST Council Meeting: Changes in GST Rate on Services

The 37th GST Council meeting had taken place in Goa on 20th September 2019. The meeting was presided by the honorable Finance Minister of India Smt. Nirmala Sitharaman.

The GST Council has passed noteworthy decisions in the interest of these traders. The council has reduced the GST rate on goods. Apart from that, the GST rate has been reduced on several services. 

Here, we shall discuss the important changes made in the GST rate on services.

 

#1. GST on hospitality & tourism

One of the major decisions of the 37th GST Council meeting is regarding the reduction of the GST rates on the Hotel room rentals. The current GST rate on hotel room tariff up to ₹7500 and above was 28%. However, the new GST rates on hotel room rentals are as follows:

Room rental per night (in ₹)

GST rate (%)

 Up to 1000 and less

Nil

 From 1001 to 7500

12%

 Above 7501 

18%


#2. GST on Catering services

The GST rate on the outdoor catering services, that involve a daily tariff for the accommodation of 7,501/-, has been reduced from the current 18% (with ITC) to 5% (without ITC). This rate shall be applicable to all kinds of catering services. 

However, indoor Catering, i.e. inside the premises with the daily tariff of accommodation 7,501/- and above shall be 18%, and with ITC.


#3. GST on Job work

Following changes have been made to the GST rates on job work services:

  • GST on Job work services in respect of diamond-cutting has been reduced from 5% to 1.5%.
  • GST on Job work services of machinery in respect of engineering has been reduced from 18% to 12%. However, this shall exclude the job work service in case of the body of buses. Here, the GST rate will remain at 18% for the bus manufacturers having GST registration.

#4. GST exempt services

In order to provide relief to many service providers having GST registration, several services have been made GST exempt at the 37th GST Council meeting. Those GST exempt services have been listed below:

  1. Warehousing:

Warehousing services in relation to the following commodities are now GST exempt: 

  1. cereals, 
  2. pulses, 
  3. fruits, 
  4. nuts and vegetables, 
  5. spices, 
  6. copra, 
  7. sugarcane, 
  8. jaggery, 
  9. raw vegetable fibers such as cotton, flax, jute, etc., 
  10. indigo, 
  11. unmanufactured tobacco, 
  12. betel leaves, 
  13. tendu leaves, 
  14. rice, 
  15. coffee and tea.

 

  1. Insurance:

In respect of insurance services, the following services are now GST exempt:

  • The “Bangla Shasya Bima Yojna” crop insurance scheme of West Bengal Government has been made GST exempt.
  • Life insurance services provided or agreed to be provided by the Central Armed Paramilitary Forces (CAPF) under the Ministry of Home Affairs, are now GST exempt. This will include the Group Insurance Funds given to their members in the respective Group Insurance Schemes of the CAPF.

#5. Export promotion measures

Besides, the GST council has exempt several services of the exporters having GST registration in order to promote exports from India. These are listed below:

  • Services provided by an intermediary to the supplier or recipient of goods, when both are located outside the taxable territory.
  • Besides, in case of export freight by air or via sea increase the validity of conditional GST exemption has been extended till 30th September 2020. This is to provide further relief to the exporters having GST registration.

These are some of the changes made in the GST rate of services at the 37th GST Council Meeting.


To know further GST rate changes, refer to th 

If you need any further assistance regarding GST registration, please feel free to contact our business advisor at 8881-069-069.

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