Tax exemption sought for prasadam

All services provided by the government to companies and business enterprises are taxable

Amaravati: GST Council on Friday, the second day of the 14th meeting at Srinagar, mainly discussed the exemptions and rates of tax on different services. Finance minister Yanamala Ramakrishnudu accepted the proposals of the fitment committee on services. According to a release, Yanamala has accepted the proposal where all services provided by government to individuals such as birth certificates, passport etc to citizen are to be exempted from tax.

All services provided by government to companies and other business people are to be taxable. Services provided by state governments like granting licences to liquor dealers are to be taxable. Even though certain states requested for exemption, Andhra Pradesh does not support such proposal as the commodity involved here is liquor, which is demerit goods.Supply of food/drinks in restaurants, have been requested for treating separately, air-conditioned and non air-conditioned and also star and non-star hotels for levying tax. Renting of hotel rooms- exemption up to Rs 1,000 is accepted.

Service tax on all hospitals including corporate hospitals is to be exempted. At present, under AP Luxury Tax Act, tax is being collected as 5% on the room rents of Rs 500 and above received by the corporate hospitals and there will not be any tax under GST.

Regarding entertainment, for films screened in cinema theatres it was proposed that no exemption should be provided and if any government wishes to provide any concession, it should be through reimbursement of tax paid. For job works, no exemption should be given on any ground. Small job works with less than Rs 20 lakh, in any case will not be required to be registered and tax will be collected on reverse charge basis from the registered firms.

On the works contract service, as the consideration includes land portion of about 33 per cent, it is kept in 1 percent rate. The finance minister stated that ITC claimed by real estate people should be transferred to consumer. The advertisement services provided on print media to be taxable at 5 per cent with facility to avail input tax credit on news print which is taxable.

It has been decided that the advertisement services provided on electronic media and social media to be taxable with facility to avail input tax credit. On the goods sector, the minister requested to exempt Prasadam, Bhog or Mahabhog by religious institutions and the same is accepted by all. Further, the proposal to exempt human hair, which is taxable under AP VAT Act, is accepted by the Finance Minister.