Education, healthcare and pilgrimages will continue to be out of service tax net even under the GST regime as the Centre is against giving any shock in the first year of the rollout by bringing in new services.
Besides making a strong case to the GST Council for not touching services that are out of tax net currently, the Centre will also pitch for keeping concessional rate for services like transport at the current level, Revenue Secretary Hasmukh Adhia told PTI in an interview.
The GST Council, headed by Union Finance Minister Arun Jaitley and comprising representatives of all states, is scheduled to meet in Srinagar on May 18-19 to decide on rates various good and services will be charged in the new indirect tax regime that is being targeted for rollout fromJuly 1.
Adhia said 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.
GST will subsume central levies like excise duty on manufactured products and service tax on rendering of services as well as state VAT on sale, to make for a national sales tax that will be levied at the time of consumption of a product or service.
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.
“Our entire purpose will be that we don’t upset anything that is there now. We will try to do some smooth landing. So we will recommend to GST Council that whatever is the existing exemption list for service tax they should continue because we cannot do too many things at the same time,” he said.
Currently, there are 17 items in negative list of services on which service tax is not levied.
On top of that there are over 60 services, like religious pilgrimage, healthcare, education, skill development, journalistic activities which are exempt from service tax.