“Nine” important changes in GST in “Navratri”
Courtesy: CA Umesh Sharma
Arjuna (Fictional Character): Krishna, The festival of Navratri is being celebrated with great enthusiasm. Here in GST, new notifications have brought enthusiasm. So, what are they about?
Krishna(Fictional Character): Arjuna, today it’s “ninth” day of Navratri. Government has issued various notifications in GST. So, we are going to see 9 important changes brought in GST. All the proposed changes would be effective from 01-10-2019.
Arjuna: Krishna, What are9 important changes made effective from 01-10-2019?
Krishna: Arjuna,The9 important changes effective from 01-10-2019 are as follows:
· Applicability of RCM on renting of motor vehicle:
Service of renting of motor vehicle by any Individual/Firm/LLP to any body corporate shall be liable to RCM, tax to be paid @ 5% on such service. However if the provider of service pays GST @ 12%, then RCM on such transaction won’t apply i.e. service provider would pay tax on forward charge basis.
· Exemption to transportation service of goods by Air/Vessel extended:
The service of transportation of goods by Air/Vessel from clearance to place outside India was exempted till 31.03.2019. However this exemption is extended till 30.09.2020
· No option of Composition Scheme for manufacturers of aerated water:
Manufacturer of aerated water cannot opt for “Composition Scheme” from 01.10.2019.
· Exemption to warehousing of other agricultural produce:
Warehousing of cereals, pulses, fruits, nuts, vegetables, etc has further been exempted from ambit of GST.
· Job work service:
GST rate on supply of machine job work such as in engineering industry has been reduced to 12% from 18%. The rate has been reduced to 12% for non-manufacturing job work while rate of 18% would be applicable for manufacturing job work. Here the definition of manufacturing is of prime importance.
· Hospitality and tourism:
a. The GST rate of tax on hotel accommodation service is nil till transaction value of Rs. 1000 per day. If the transaction value is above Rs. 1000 per day but below Rs. 7500 per day then GST rate of 12% is applicable. Also, GST rate of 18% is applicable if transaction value is above Rs. 7500 per day.
b. The GST tax rate on outdoor catering services other than in premises having tariff of unit of accommodation of Rs 7501 per day has been reduced.It was reduced to 5% without ITCfrom present 18% with ITC. The rate shall be mandatory for all kinds of catering.
c. Catering in premises with tariff of Rs 7501 and above per day shall remain at 18% with ITC.
· Reduction in GST rates from 5% to nil on:
a. Dried tamarind
b. Plates and cups made up of leaves/flowers/bark.
· GST rate on caffeinated beverages has been increased from 18% to 28%+12% compensation cess.
· The semi-precious stones other than diamonds which was taxed @ 3% shall now be taxed @ 0.25%.
Arjuna: Krishna, what lesson should one learn from this?
Krishna: Arjuna,the changes proposed of 37th GST Council Meeting were finally notified. Government is amending law to simplify GST so that taxpayer celebrate victory in real sense along with celebration of “Dussehra”. Let us hope that efforts taken by government prove fruitful and taxpayers celebrate victory in true sense. Wish you all a very “Happy Dussehra”