Srinagar, May 19 (PTI): The Goods & Services Tax regime due to come into effect in July has put services under four slabs, but continued the exemption on education and healthcare, Union finance minister Arun Jaitley said here.
The GST council on Friday set the tax rates on service at five, 12, 18 and 28 per cent, in line with what it had set for goods. With this, rates of all items except a handful including gold, have been decided ahead of the roll out of the GST regime from July 1.
“We are in a state of readiness,” Jaitley said, briefing reporters after the council’s meeting.
He said telecom and financial services would be taxed at a standard rate of 18 per cent.
Transport services will be taxed at five per cent. This rate will apply to cab aggregators such as Ola and Uber as well as those who currently pay six per cent tax.
Non-AC train travel will be exempt but AC train travel will attract a GST of five per cent.
Revenue Secretary Hashmukh Adhia said economy class air travel will attract five per cent GST while business class will be charged 12 cent, he said.
Jaitley said non-AC restaurants will charge 12 per cent GST on food bill. Tax rate for AC restaurants and those with liquor licence will be 18 per cent, while 5-star hotels will charge 28 per cent GST.
Entertainment tax will be merged with service tax under GST and a composite 28 per cent levy charged on cinema services as well as gambling or betting at race course.
While the rate proposed for cinema halls is lower than the 40 to 55 per cent they pay now, cinema tickets are unlikely to get cheaper as states hold the right to levy local charges on them.
Jaitley said tax on gold and precious metals will be taken up at the next meeting of the Council on June 3.
GST on services was the main item discussed at the GST meet on Friday, he said.
E-commerce players such as Flipkart and Snapdeal will have to deduct one per cent as TCS or tax collected at source while making payments to suppliers, Adhia said.