GST exemption in Services

GST exemption in Services

Subject: Economy

Context:

Last week, the GST Council recommended doing away with exemptions on some services, including those provided by the RBI, IRDA, SEBI, FSSAI, hotel accommodation priced up to ₹1,000/day and room rent (excluding ICU) exceeding ₹5,000 per day per patient, beside others.

Concept:

• At the time of introduction, 81 categories of services were on the exemption list which was expanded further. Some of the exempted services are:
• Services by Government or a local authority excluding the following services—

(i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Government;

(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;

(iii) transport of goods or passengers; or

(iv) any service, other than services covered under clauses (i) to (iii) above, provided to business entities.

• Services by the Reserve Bank of India 
• Services by a foreign diplomatic mission located in India
• Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fiber, fuel, raw material or other similar products or agricultural produce.
• Service by way of access to a road or a bridge on payment of toll charges.
• Transmission or distribution of electricity by an electricity transmission or distribution utility.
• Services by way of renting of residential dwelling for use as residence.
• Services provided to the United Nations or a specified international organization.
• 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.
• Services by a veterinary clinic in relation to health care of animals or birds.
• Services by a specified organisation in respect of a religious pilgrimage facilitated by the Ministry of External Affairs of the Government of India, under bilateral arrangement.
• Services by way of collecting or providing news by an independent journalist, Press Trust of India or United News of India.
• Services by an organiser to any person in respect of a business exhibition held outside India.
• Services provided to the Government under any insurance scheme for which total premium is paid by Government
• Services provided to the Government under any training programme for which total expenditure is borne by the Government.
• Services provided by the Goods and Services Tax Network (GSTN) to the Central Government or State Governments/Union Territories for implementation of Goods and Services Tax (GST).