{"id":8052,"date":"2017-08-11T09:14:43","date_gmt":"2017-08-11T09:14:43","guid":{"rendered":"https:\/\/legaldesk.com\/?p=8052"},"modified":"2026-10-26T10:15:36","modified_gmt":"2026-10-26T10:15:36","slug":"how-will-gst-impact-the-service-sector","status":"publish","type":"post","link":"https:\/\/webdemo.d-apps.in\/legaldesk\/how-will-gst-impact-the-service-sector","title":{"rendered":"How Will GST Impact The Service Sector?"},"content":{"rendered":"

The service sector in the country amounts to a considerable share in the GDP and its performance is critical. The service sector in the country is characterized by series of small establishments with low value additions that houses large numbers of unskilled persons. Though the GST’s contribution to the economy is significant, the service tax will amount to 2 percent from an enterprise. Some of the most important service sectors are banking, telecom, insurance, construction, business support and transportation.\u00a0<\/span><\/p>\n

The Government has come up with a four-tier GST rate structure for service providers such as 5 percent, 12 percent, 18 percent and 28 percent. However the bulk of services will be taxed at 18 percent. It is also said that the GST is more likely to increase the tax frequency for this sector.<\/p>\n

\n

Under GST, double taxation effect caused due to disputed goods and services in the current tax regime will be removed. Under the GST regime both supplies of goods and services will be treated equally with a unique rate of tax individually.<\/p>\n<\/blockquote>\n

In terms of registration, the main challenge in the GST for service providers will be multiple registration. The service tax will be collected by the Center under a centralized registration format. However, States are unwilling to agree to centralized registration and thus the government is exploring a new arrangement for centralize compliance verification. This is an organised effort to persuade states through the GST council.<\/p>\n

GST Impact On Service Providers<\/span><\/h2>\n

Expensive Services<\/span><\/h3>\n

Currently service tax is applicable to 15 percent on services rendered which includes 0.5 percent for Swachh Bharath cess and 0.5 percent for Krishi Kalyan Cess. The GST will increase the rate of tax ranging between 18 percent to 28 percent which will result in expensive services and works. Whenever services attract lower than 15 percent service tax rates, the government will intervene to maintain its percentage. <\/span><\/p>\n

Collection Of Service Tax from J&K<\/span><\/h3>\n

Under the GST regime, service tax will be extended and collected throughout the entire country including Jammu and Kashmir. The GST also allows the Central Government to collect service taxes <\/a>on rendered services in the state of Jammu and Kashmir which will eventually increase the Government’s revenue.<\/span><\/p>\n

Registering The Place Of Business <\/span><\/h3>\n

Under GST, centralized registration will not be available as the service provider needs to get registered under that particular State Government for registering his business office as well as from where he\/she intends to provide services. <\/span><\/p>\n

GST Returns<\/span><\/h3>\n

The GST Service tax law offers for a number of returns<\/a> while the current service tax system provides two half-yearly returns in regards to the services rendered during that period. <\/span><\/p>\n

The following number of GST service tax returns are:<\/span><\/p>\n