Changes in GST RATES on services and Old vs New GST rates w.e.f 01.10.2021-

The CBIC vide Notification No. 06/2021 Central Tax (Rate) dated September 30, 2021 has further amended Notification No. 11/2017-Central Tax (Rate) dated June 28, 2017 (“Services rate notification”), as under-

Changes in GST RATES on services and Old vs New GST rates w.e.f 01.10.2021

1. Wherever Section 12AA of Income Tax Act, 1961 is mentioned, now Section 12AB is also inserted.

2. Temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property right (“IP right”) shall now be charged at rationalised rate of 18%, earlier there were two rates 12 % & 18 %.

3. Services by way of job work in relation to manufacture of alcoholic liquor for human consumption shall be taxable at 18%, earlier it was 5%.

4. Services by way of printing of all goods falling under Chapter 48 or 49 [including newspapers, books (including Braille books), journals and periodicals], shall now be charged at rationalised rate of 18% instead of 12%.

5. Services by way of admission to-III}

(a) theme parks, water parks and any other place having joy rides, merry- go rounds, go carting, or

(b) ballet, Shall now be charged at 18%.

III(a)-Services by way of admission to (a) casinos or race clubs or any place having casinos or race clubs or (b) sporting events like Indian Premier League

Shall now be charged at 28%

Old rates vs New Rates- Now question comes which rate applicable for services rendered prior to 01.10.2021……..

Section 14 of CGST ACT 2017 read with section 31 help us to determine rate to be charged as under-

There are 3 events – Date of supply of services, Date of Payment and Date of issuance of Invoice and if any two events completed prior to 01.10.2021, old rate applicable and if only one event completed prior to 01.10.2021 then new rate applicable .

Let’s take an example to under stand better-

First case -Services are taxable @ 12 % before 01.10.2021 and 18 % after 01.10.2021 but Invoice was issued prior to 01.10.2021 @ 12% but payment done after 01.10.2021 and supply also rendered after 01.10.2021 so in above case new rate applicable even invoice was issued earlier so assessee has to issue debit note for rate difference.

Second Case – Services are taxable @ 12 % before 01.10.2021 and 18 % after 01.10.2021 but supply of services was completed before 01.10.2021 and payment and issue of invoice to be done after 01.10.2021 so in that case though services completed before 01.10.2021 but still taxable @ 18 % as two events are yet to be done as on 01.10.2021.

Queries/doubts mailed @ [email protected]

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