GST rates slashed for transport cos, tour operators

The Goods and Services Tax (GST) Council slashed tax rates on transportation through ropeways and renting of goods carriage and exempted foreign component of tour packages from the tax, providing significant relief to transport and tourism sectors.

The council also offered relief to small businesses selling through the ecommerce route by waiving compulsory GST registration.

It recommended that GST on the transport of goods and passengers by ropeways be reduced from 18% to 5% with an input tax credit.

It recommended GST on renting goods carriage with operators where the cost of fuel is included in the consideration be reduced to 12% from 18%.

The council argued that the reason for lower rates on the transport of goods and passengers is that petrol, diesel, and aviation fuel are outside the GST.

Road transporters will now have the flexibility to opt for paying GST at 5% without input tax credit or GST at 12% with such credit. The option will be available at the beginning of a financial year.

Currently, transport of goods by road attracts GST at the same rates but there is no option to switch from one rate to the other.