India is weighing a sweeping revamp of its goods and services tax (GST) structure, including scrapping the 12% and 28% slabs, with proposals to cut rates on services such as beauty parlours and low-cost movie tickets, sources familiar with the matter said.
5% GST on hotel stay
Under a proposal expected to be tabled before the Group of Ministers on rate rationalisation, the Centre has suggested cutting GST on hotel accommodation priced up to ₹7,500 per night from the current 12% with input tax credit (ITC) to 5% without ITC.
Beauty, physical well-being to get cheaper
Beauty and physical well-being services could also get cheaper, with rates seen falling from 18% with ITC to 5% without ITC, the proposal showed.
For entertainment, admission charges for cinematograph films priced below ₹100 are proposed to be reduced from 12% with ITC to 5% with ITC.
Gambling, sports events to draw higher GST
At the same time, the Centre has suggested raising rates for high-value services currently taxed at 28% with ITC to 40% with ITC. These include admission to casinos, race clubs, and sporting events such as the Indian Premier League (IPL), along with betting, gambling, horse-racing and lotteries.
The government is aiming to simplify the tax structure and align rates with revenue considerations, the people said, adding that the final approval would rest with the GST Council.
