Rail travel, capitation fees to come under GST net

Railway travel, capitation fees or donations in educational institutes and non-compete services are among the many new services that may come under the proposed Goods and Services Tax (GST), says a concept paper on the issue.

The new service may come under the GST as a result of transition towards negative list, the Concept Paper prepared by the Tax Research Unit of the Department of Revenue in the Finance Ministry.

It says some of the notable services that could come under the GST are services provided by government for a fee or user-charge, transportation of passengers by railways, transportation of renting of vacant land for commercial use excluding agriculture use, capitation fees or donation in education institutes, non-compete

services, some additional services relating to construction and real estate.

The negative list contains 27 services including funeral, burial and mortuary agencies, interest paid on deposits by bank, services provided by independent journalists, dividend on investments, and transport of passenger in public transport are excluded from paying tax.

The government has invited feedback, views and suggestions by Sept 30 on the Concept Paper prepared by a team of officers with inputs from industry bodies like CII, Ficci, Assocham and PHDCI.

At present, the Centre imposes a 10 per cent tax on 119 services. The government proposes to tax most of the services under the Goods and Service Tax (GST) regime.