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Date: January 18, 2018
Subject: GST Council Approves Extensive GST Rate Relief and Clarifications on Services
Description:

The GST Council, in its 25th meeting held on 18 January 2018 under the chairmanship of the Union Finance Minister, recommended a broad set of relief measures and clarifications relating to GST rates on services, covering a wide range of social, infrastructure, financial, and welfare sectors. Major exemptions were approved for services such as information supplied under the RTI Act, legal services provided to government entities, services related to education including examinations and online journals, fumigation of agricultural produce, healthcare services provided by hospitals and doctors, and several insurance and reinsurance services linked to government schemes. Significant rate reductions were recommended, including lowering GST from 18 percent to 12 percent on metro and monorail construction, common effluent treatment plants, mining and exploration of petroleum and natural gas, and works contract services provided by sub-contractors to government projects, while tailoring services and job work in leather and footwear were reduced to 5 percent. Relief was also extended to tourism, housing, and infrastructure sectors through concessional rates on tour operator services, pipeline transportation of petroleum products, affordable housing under PMAY, and services linked to airports under the Regional Connectivity Scheme. The Council further rationalised reverse charge provisions, valuation rules, and exemptions for composite and pure services supplied to government bodies, and issued detailed clarifications to resolve disputes relating to accommodation services, entertainment and amusement activities, healthcare-related food supplies, betting and gambling services, and leasing of goods. These recommendations were aimed at reducing the tax burden, removing interpretational ambiguities, and improving ease of doing business, with notifications proposed to give effect to the decisions from 25 January 2018.

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