1. GST: Ola, Uber, economy air travel to be taxed at 5%; metro, lowest class train travel to be tax free

GST: Ola, Uber, economy air travel to be taxed at 5%; metro, lowest class train travel to be tax free

Your local taxi rides in cab aggregators Ola and Uber will be taxed at 5% -- the lowest slab for services under GST.

By: | Updated: May 19, 2017 7:04 PM
The lower tax slab of 5% will apply to the economy class airfare as well, according to the decision of the GST council on fixing the rates for various services under the new tax regime.

Your local taxi rides in cab aggregators Ola and Uber will be taxed at 5% — the lowest slab for services under GST. The lower tax slab of 5% will apply to the economy class airfare as well, according to the decision of the GST council on fixing the rates for various services under the new tax regime.

The GST council, tasked with framing rules for the implementation of most sweeping tax reform India has ever seen since independence, has fixed a tax rate of 5% on most transport services, which is lower than expected, providing major relief to the people across the nation.

The council decided to keep the tax in the lower bracket for transport services, since most such services, such as air transport and goods transport, use petroleum products as primary input, which is outside the ambit of GST, Finance Minister Arun Jaitley said, adding that those paying taxes on petroleum will not be able to take input credit under this regime.

Besides, some transport services, such as railway transport in the lowest category, are exempted from the tax levy altogether, Arun Jaitley said. Similarly, travel in metro trains, local trains, travel for religious purposes and Haj yatra will remain tax free under the new regime.

Arun Jaitley said that under the current tax system, certain set of services are exempt from tax, and most of those exemptions will continue as those provisions have been grandfathered into the new GST regime.

Most services, including telecom and financial services, have been fitted into the standard tax rate of 18%, while essential services such as education and healthcare will attract no tax at all.

Yesterday, the GST council, tasked with framing rules for the implementation of most sweeping tax reform India has ever seen since independence, finalised tax rates under the new proposed regime for most of the consumer goods, including items of daily use, eatables, durables, automobiles and more.

Under the new GST regime, 81% of the items have been kept at the lower tax slabs of 5%, 12% and 18%, while exempting from tax essential daily consumption Items including, fresh meat, fish, chicken, eggs, milk, curd, natural honey, fresh fruits, vegetables, flour and bread. On the other hand, certain luxury goods and sin goods would attract a higher tax of 28% and in some cases, also a cess over and above their 28% tax levy. The 12% and 18% tax bracket together account for two-thirds of all items.

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