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Impact of GST on Service Sector of India

In an earlier blog we discuss the manufacturing sector, and how it's performing under GST now in this blog, we will talk about the Service sector.
As we discuss earlier service sector is contributing almost 50% of GDP nowadays, and it's been the most successful sector after LPG and its been predicting that it will continue to rise shortly.
Indirect taxes have always been contributing more than direct fees to Govt. revenue. Service solely added a significant contribution in charge also.
Service sector not only dominate in GDP but also attracts foreign investment in the economy, Service sector also provided a significant amount of employment in the country.
The GST council has decided in its 22nd meeting that presently, anyone making inter-state taxable supplies except inter-state job worker is compulsorily required to register irrespective of turnover. It has now been decided to exempt those service providers whose annual aggregate turnover is less than Rs. 20 Lakh ( Rs. 10 Lakh in particular category states except for J&K ) from obtaining registration even if they are making inter-state taxable supplies of service. This measure is expected to significantly reduce the compliance cost of small service providers.
A GST council has changed the rates on services in a 22nd meeting held on 6th October 2017 which include changes in the function below.
for understanding following decisions are taken bu GST Council under Chairmanship of Union Finance Minister Shri Arun Jaitley on 6th Oct. GST rates on job work service is being rationalized as follows



S. No.
Description of Service
Rate
1
Job work services about all products falling in Chapter 71 (including imitation jewelry)
5%
2
Job work service about food and food products falling under Chapters 1 to 22 of the HS code ( except packing of processed milk into packets )
5%
3
Job work service about products falling under Chapters 23 of the HS code except dog and cat food put up for retail sale 
5%
4
Job work about the manufacture of umbrella
12%
5
Job work about the production of clay bricks falling under
5%
6
Service by way of printing on job work basis or on goods belonging to others about the printing of all products falling under chapter 48 or 49
5%
7
Service by way of printing on job work basis or on goods belonging to others about the printing of all goods falling under chapter 48 or 49
12%
8
Service by way of printing on job work basis or on assets belonging to others about the printing of all products falling under chapter 48 or 49 other than those which cover under 6 & 7
18%
9
Service by way of printing on job work basis or on goods belonging to others about the printing of all products falling under chapter 48 or 49 which attract GST 5% or nil, the paper used for  printing belong to printer
12%
10
Service by way of printing on job work basis or on goods belonging to others about page of all products falling under chapter 48 or 49 which attract GST 12 %, the paper used for  printing belong to printer
12%
11
Service by way of printing on job work basis or on goods belonging to others about the page of all products falling under chapter 48 or 49 which attract GST 18% paper used for  printing belong to printer
18%
12
To issue a clarification about the classification of printing products







In the previous tax regime, service tax was applicable at the rate of 15% on service rendered which include 0.5% for swatch Bharat cess and 0.5% for Krishi Kalyan cess.
It has been extended at 18% doing the service and works contracts costlier.
Revenue sector also mentioned the level of taxation has been increased in the last GST structure


 In the previous tax system both central and state govt. had right to collect the tax according to their rights but with the introduction of GST regime, the double taxation effects due to disputed goods and service in the previous tax system have been eliminated



 Conclusion :- 
                       GST is a bit complicated for small business as there are a different type of services charge at different rates as we saw earlier in chart, as every coin has two sides it will be more clear for people as well as business in near future, in early stages business and people will suffer problems related to it. Soon as the GST and new tax rate will get regulated in the market, it will become easy to deal with it than now.
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Location: Mumbai, Maharashtra, India

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