GST to affect your hair cutting, movies charges

May 19, 2017 06:01 PM

New Delhi: The GST Goods and Services Tax) Council on Friday met to fix the tax to be levied on services. The new tax rates would affect everything from your restaurant visits, movie dates, visits to the salon and even your phone bills.

The Centre and the states will also decide the tax rate on items like gold, biscuits and footwear that were not fixed in Thursday's meeting in Srinagar where rates for 1211 items were finalised.

The official announcements on the tax slabs on services is awaited. However, source-based information from wire agencies seem to suggest that financial services as well as telecom services will attract a service tax of 18 per cent.

Common services like telecom and banking were expected to come in the lower tax slab. That is what some states had been rooting for. The service tax rate currently stands at 15%. The GST slab rates are 5 per cent, 12 per cent, 18 per cent and 28 per cent.

 Some states as well as industry experts are of the view that putting common services in the 18 per cent will hurt the common man. Watching movies at multiplexes or eating out at air-conditioned restaurants is likely to attract a higher tax slab compared to common services. Restaurants in 5-star hotels will face the highest tax slab of 28 per cent, sources told Times of India.

The rollout of GST is expected to add 2 per cent to India's GDP or gross domestic product. Under the current system, a product is taxed multiple times with different state levies and central taxes.

On Friday, the GST on gold was not decided. The GST Council will meet again on June 3 to decide on the tax slab for cigarettes and bidis. Education and healthcare has been exempted from any taxes on expected lines.

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