GST or Goods and Services Tax is a comprehensive indirect tax implemented in India on 1st July 2017. It replaced multiple taxes such as excise duty, service tax, and VAT into one unified tax system. The GST council has categorized goods and services into different tax slabs ranging from 0% to 28%. However, there are certain items that are not subsumed in GST. Let's take a closer look at them.
Alcohol for Human Consumption
One of the significant items which are not subsumed in GST is alcohol for human consumption. The states have the power to levy excise duty on alcohol. However, they are not allowed to impose GST on it. Alcohol for human consumption is still taxed as per the old method of taxation.
Crude Oil, Natural Gas, Aviation Fuel and Petrol/Diesel
The second item that is not subsumed in GST is crude oil, natural gas, aviation fuel and petrol/diesel. These items are still taxed as per the old method of taxation. The central government levies excise duty, and the state government imposes VAT on these products.
Electricity
Electricity is another item that is not subsumed in GST. The state government levies electricity duty on the consumption of electricity. However, there is a possibility that it may be brought under the ambit of GST in the future.
Real Estate
Real estate is not entirely subsumed in GST. The sale of land and buildings are exempted from GST. However, under construction properties come under the ambit of GST. The rate of GST for under-construction properties is 5%.
Healthcare and Education Services
Healthcare and education services are also exempted from GST. Services provided by hospitals, dispensaries, and clinics for diagnosis, treatment or care for illness, injury or deformity, and education services are exempted from GST. However, if these services are provided by private entities, they may come under the ambit of GST.
Non-Taxable Supplies
There are certain non-taxable supplies that are not subsumed in GST. These supplies include goods and services that are outside the purview of GST. For example, goods and services that are exported outside India, goods and services that are supplied to SEZ units, and goods and services that are supplied by an unregistered dealer to a registered dealer.
Conclusion
In conclusion, there are certain items that are not subsumed in GST. These items include alcohol for human consumption, crude oil, natural gas, aviation fuel, petrol/diesel, electricity, real estate, healthcare, education services, and non-taxable supplies. It is essential to understand the items that are not subsumed in GST to avoid any confusion while paying taxes.
