GST IS NOT APPLICABLE IN CERTAIN SECTORS LIKE HEALTHCARE, EDUCATION AND PILGRIMAGE

 

INTRODUCTION

 

Goods and Services Tax (GST) replaced most of the previous taxes in India. Now GST is going to be levied in the least stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. Only value addition is going to be taxed and the burden of tax is to be borne by the ultimate consumer.

 

However, GST is not applicable in various sectors like education, healthcare, pilgrimage etc., as it will be subject to VAT. This is because the government has already implemented a new tax structure for all sectors which have been affected by GST. The main reason behind this change is that the tax rates are going to be lower than those of other sectors. The changes will also affect some industries such as tourism, hospitality and travel industry where GST.

 

GST in Healthcare and Pharma Industry

 

The health industry has sought a zero rate of products and services tax (GST) in healthcare services and insurance premiums. The Confederation of Indian Industry has said since GST isn't payable on healthcare services and industry, service providers aren't eligible to avail credit on the input taxes paid by it. Under the GST regime, the internet impact of revised tax rates on inputs (goods and services) consumed by hospitals has increased.

 

The Indian Healthcare Industry is now among the main sectors concerning revenue and employment. because the expenditure on Healthcare increases, so do revenues from taxes. GST subsumes various taxes of the complex legal system within the country into one uniform legal system.

 

It is expected that GST would have a constructive effect on the Healthcare Industry particularly the Pharma sector. it might help the industries by streamlining the taxation structure since 8 differing types of taxes are imposed on the Pharmaceutical Industry today. GST on pharma sector would also help the pharmaceutical companies to reduce their costs.

An amalgamation of all the taxes into one uniform tax will ease the way of doing business within the country, also as minimising the cascading effects of manifold taxes that are applied to at least one product. Moreover, GST would also improve the operational efficiency by rationalising the availability chain that would alone add 2 per cent to the country’s pharmaceutical industry. GST on pharma sector would help the Pharmaceutical companies in rationalising their supply chain; the businesses would wish to review their strategy and distribution networks. Furthermore, GST implementation would also enable a flow of seamless decrease, improvement the general compliance creates an equal level playing field for the Pharmaceutical companies within the country. The most important advantage for the businesses would be the reduction within the overall transaction costs with the withdrawal of CST (Central Sales Tax). GST is additionally expected to lower the manufacturing cost.

 

GST in The Education Industry

 

Education is one of the main sectors for an economy. The education of the country's youth will decide how the economy of that country will flourish. Education promotes understanding, vision, creativity and productivity of individuals which helps in the advancement of a rustic. In India, education is provided with both by public sector education institutions also as private sectors education institutions. Indian government's foremost priority is to supply low-cost education every child. That's why the education sector enjoy many tax exemptions as they're not taxed or comes in a negative list. the tutorial institutions that are granted the exemption from GST are pre-schools and better secondary educational institutes – both private and Government.

 

The educational services that aren't exempted from GST are after school activities offered directly by third parties, food and accommodation supplied for the excursion, supplies provided by third parties like an instrument, computers, sporting goods, and uniform, stationery, and other non-academic related supplies. the tutorial services led by training and training foundations also are not exempted from GST.

 

GST applicable for Coaching Classes - As clearing competitive exams and entrance exams seems impossible without taking professional coaching, coaching institutes form an integral part of education. GST has raised the rate to 18% from 14% for these coaching institutes. the oldsters whose children are close to starting coaching for IITs and other competitive examinations are going to be facing the inconvenience.

 

APPLICABILITY OF GST ON HIGHER EDUCATIONAL INSTITUTIONS - Services provided to higher educational institutions is taxable. While services provided by an academic institution are out of the GST ambit, an equivalent isn't the case with services provided to an academic institution. The GST exemption on procurements is out there only to colleges (from pre-school up to higher lyceum or its equivalent). Hence, the „input‟ or supply of services like transportation, catering, housekeeping, services concerning admission or conduct of examination to higher educational institutions will bear GST levy. this may need to be borne by the upper institution.

 

• Private institution and training centres don't have any specific curriculum and don't conduct any examination or award any qualification. Hence taxable at the speed of 18 per cent.
• Distance Education is haunted generally for education and hence taxable at the speed of 18 per cent.

 

 

GST in Pilgrimage

 

As per GST Law 2017, there's no GST payable on Services by a specified organization in respect of a spiritual pilgrimage facilitated by the Ministry of External Affairs of the Govt of India, under the bilateral arrangement.

 

So, the rate of GST payable on Services by a specified organization in respect of a spiritual pilgrimage facilitated by the Ministry of External Affairs of the Govt of India, under a bilateral arrangement is nil rate.

Last year, the govt introduced a replacement category for pilgrimage and allowed single women to undertake Haj without a male companion. Khan said, “We had been demanding zero GST for Haj flights. Minority Affairs Minister Mukhtar Abbas Naqvi had also raised the difficulty with the Centre and asked the govt to scale back the GST to five per cent for all religious tours. it's an honest move to relax GST for all religious tours.

 

Minority Affairs Minister Mukhtar Abbas Naqvi had also raised the difficulty of bringing down taxes on pilgrimage and asked the govt to scale back GST to five per cent for all religious tours, HCOI Chairman Maqsood Ahmed Khan was quoted within the report as saying.

 

Pilgrimages like Kailash Man Sarovar Yatra, the Haj, and therefore the Pashupatinath tour will become cheaper with the govt on Saturday exempting religious tours from service tax. consistent with a notification, service tax exemption has been provided to ‘services by a specified organisation in respect of a spiritual pilgrimage facilitated by the govt of India under bilateral arrangement”.