The Goods and Services Tax Council will likely clarify on Tuesday that the supply of food and beverages at cinemas is taxable at the rate of 5%, similar to stand-alone restaurants.
Besides, it will also make it clear that the 22% cess is applicable on MUVs and XUVs, similar to the imposed on SUVs, sources said.
Since GST was rolled out, food and beverage services provided at cinemas has attracted GST at 18%.
Following a representation from the cinema industry, the Fitment Committee of the Council has recommended that the food or beverages served in a cinema hall are taxable as restaurant service as long as the food or beverages are supplied by way of or as part of a service and supplied independent of the cinema exhibition service.
The Council at its 50th meeting on July 11 will also consider another recommendation of the committee to clarify that the compensation cess of 22%, which is currently applicable to sports utility vehicles (SUVs), will also apply to multi utility vehicles (MUV) or multipurpose vehicles or crossover utility vehicles (XUVs).
For this purpose, the committee has recommended amending the relevant entry to include all utility vehicles by whatever name called, provided they met the parameters of length greater than 4000 mm, engine capacity greater than 1500 cc and ground clearance more than 170 mm, sources said.
Among a slew of clarifications on tax rates proposed, the Fitment Committee has suggested exempting of 5% or 12% IGST on medicines and food for special medical purposes (FSMP) imported for the treatment of rare diseases.
Similarly, it has suggested GST exemption to satellite launch services provided by private organisations as India is emerging as a strong player in the global commercial space market.
Currently, satellite launch services by the Indian Space Research Organisation (ISRO), Antrix Corporation Limited (ACL) or New Space India Limited (NSIL) are exempt from GST.
Separately, to check fake registration, the GST Council will likely reduce the time period to 30 days from 45 days currently for the submission of PAN-linked bank account details of the person seeking registration with tax authorities. It will also likely provide for mandatory physical verification of the business premises of “high risk” applicants before granting of GST registration.