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02.06.2017

Final Preparations For Indian VAT Roll Out

India

 

India’s GST Council held its last meeting on 19th May 2017 to discuss and approve GST rates for services and to finalise the classification of services into tax categories, including exemptions and services that will be taxed under the reverse charge mechanism.

The following is a breakdown of the VAT rates approved by the GST Council, with the availability of an input tax credit, for key travel and entertainment expenses;

Transport;

Transport of passengers by air in economy class – 5%

Transport of passengers by air in other than economy class – 12%

Transport of passengers by rail (other than sleeper class) – 5%

Food and drink;

Supply of Food/drinks in restaurant not having the facility of air-conditioning or central heating at any time during the year and not having a license to serve liquor – 12%

Supply of food/drinks in restaurant having license to serve liquor – 18%

Supply of food/drinks in restaurant having facility of air-conditioning or central heating at any time during the year – 18%

Supply of food/drinks in outdoor catering – 18%

Supply of Food/drinks in air-conditioned restaurant in 5-star or above rated Hotel – 28%

Accommodation;

Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having a room tariff of Rs.1000 or more but less than Rs.2500 per room, per day – 12%

Renting of hotels, inns, guest houses, clubs, or other commercial places meant for residential or lodging purposes with room tariff of INR 2500 and above but less than Rs.5000 per room per day – 18%

Accommodation in hotels including 5 star and above rated hotels, inns, guest house, clubs, or other commercial places meant for residential or lodging purposes, where room rent is Rs.5000/- and above per night per room – 28%

The GST Council are to meet again on 3rd June to finalise the approval of VAT rates on some specific goods like gold and textiles and are moving at a fast pace to finalise schedules and tax literature for GST implementation on 1st July 2017.

 

We know that Indirect taxes such as VAT and GST can have a huge effect on your business. As VAT rates change sporadically keeping yourself informed can be difficult.  Compliance is always crucial. That’s why our Indirect Tax Experts share their hand-picked news stories every day that you need to know. From breaking news to VAT changes and new EU legislation. We know that relevant information means better decision making. We aim to be your number 1 source for VAT and GST news.

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