Continuation of the pruning of the exemption of services on the map: secretary of the tax department


Revenue Secretary Tarun Bajaj said on Tuesday that further pruning of the exemption list for services was next on the agenda. He also ruled out giving a “ZERO” rating for the health sector.

At the time of introduction, 81 service categories were on the exemption list which has been further expanded. Last week, the GST Council recommended removing exemptions on certain services including those provided by RBI, IRDA, SEBI, FSSAI, hotel accommodation up to ₹1,000/day and rent room rate (excluding ICU) above ₹5,000 per day per patient. , next to the others. The list of exemptions is always very long.

“At the 47th meeting, we removed a lot of exemptions but there are still exemptions, there is work to be done on that on the service side, we still have a lot of exemptions. The CBIC, the GST Council and all of us, together with trade and industry, will continue to work on this if we can prune this list of exemptions. health for example, is part of it,” he said while addressing the TPS 5th anniversary event organized by CII here.

GST on room rent

Taking note of the voices raised against the decision to impose 5% GST (without ITC) on room rent (excluding ICU) exceeding ₹5,000 per day per patient, he wanted to know how many hospital rooms there are in the country and among these what is the percentage of rooms that charge more than ₹5,000. “I think it will be tiny. So if I can spend ₹5000 for a room, maybe I can spend ₹250 on GST. This GST, which goes into a common pool, will be used for the poor,” he said.

Explaining the reasons for such a decision, he said that it responds to the demand for the removal of the exemption or the reverse duty structure (higher duty on inputs and lower duty on outputs, resulting in more and more refunds). “I see no reason for there to be such kind of message that 5% GST on ₹5,000 plus non-USI room is hitting affordable healthcare,” he said.

Industry body concern

On Monday, an industry body wrote a letter expressing concern about the 5% GST on non-ICU rooms and the 12% GST on joint biomedical waste treatment facilities for the treatment or disposal of biomedical waste. Industry argued that this would create complexity. He demanded the removal of the health services exemption and introduction under the ZERO rating, so that the ITC could be used.

Bajaj said, “When you calculate your package, you cost part of it. Some of the drugs in the package also have a GST rate of 5% or other items 12%. You don’t do it manually, it can be software driven. You need to be sure what you are charging the customer. If it is over ₹5000, please continue with GST, if it is under ₹5000, do not go for GST.

He also clarified that the “ZERO” rating is only available for export. He felt that sectors such as education and other sectors that will require this. “The Center and the States also need income to make expenditures and the more we make such curves, the more the load on certain positions will increase. So the effort will be to expand the base, to have lower rates and that’s how you do it,” he said.

Published on

July 05, 2022


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