Education, healthcare to stay out of GST ambit
Revenue Secretary Hasmukh Adhia said the approach of the GST would be to avoid any shock in first year and thus the rate will be decided after a review in second or third year.
With an aim to not provide any shock to its citizens, the Union Government has decided to keep education, healthcare and pilgrimages out of service tax under the GST regime. At present, the government has set a target to roll out the GST regime across the country from 1 July 2017.
With its rolling out the GST regime will subsume central excise, service tax, VAT and other local levies and come up with something known as a national sales tax that will be levied at the time of consumption of a product or service.
Revenue Secretary Hasmukh Adhia in an interview to PTI said, “Besides making a strong case to the GST Council for not touching services that are out of tax net currently, the union government will also pitch for keeping concessional rate for services like transport at the current level”.
Adhia said the approach for the GST rollout would be to avoid any shock in the first year and any review for inclusion of a service or change in rate could be done in the second or third year of the implementation based on revenue realisation.
He also said that the endeavour would be to maintain the current tax incidence on a commodity or service at the same level in the new Goods and Services Tax (GST) regime.
As per reports, the GST council chaired by Union Finance Minister Arun Jaitley is scheduled to meet in Srinagar on 18 and 19 May 2017. The council comprises of the union finance minister and representatives of all states. During the meet, they will decide on rates of various good and services which will be charged in the new indirect tax regime.
Till date, the GST Council has approved a four-rate tax structure and they are 5 per cent, 12 per cent, 18 per cent and 28 per cent.
At present, some 17 items are kept in negative list of services on which service tax is not levied. On top of that there are over 60 services which are exempt from service tax and some of them are religious skill development, pilgrimage, education, healthcare, journalistic activities among others.