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Updates in Goods and Services Tax effective from October 1, 2019

  • Oct 11, 2019 | Divita S Gupta

The Central Board of Indirect Taxes and Customs has issued the following circulars after the 37th GST Council Meeting held on 20th September 2019 in Goa. 

Reverse Charge 
Starting October 1st, 2019, companies providing motor vehicles on rent (Uber, Ola, Meruand other rent a cab services) will be required to pay a reverse GST of 5%. Reverse charge is applicable when the supplier/vendor providing goods and services is not registered under GST and provides goods and services to a party registered under GST. In such a scenario, the latter will have to practice self-invoicing and pay the Government on behalf of the service provider. However, this charge will not be applicable if the service provider is charging GST at 12%. 

New return system rescheduled
The new return system which was to be rolled out on October 1st 2019 has now been rescheduled to roll out in April 2020. 

Changes in GST Rates

  • Service providers supplying cars on rent with a driver will be liable to pay a GST at 18%. Self drive rental cars, however, will continue to pay GST at 28%. 
  • Staying at a hotel where the tariffs falls between the bracket of Rs. 1,001/- to Rs. 7,500/- will become cheaper as the GST has been reduced to 12%. If the tariff is higher than Rs. 7500/-, a GST rate of 18% is applicable. 
  • GST rates have been revised for job work services. If the work undertaken by an employee results in the manufacture of a finished product, GST is applicable at 18%. If it doesn't result in the manufacture of a product, GST is applicable at 12%. 
  • Landowners who are transferring their ownership rights to builders under redevelopment, property development projects will not be required to register under GST. 

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Avalara helps businesses of all sizes get GST return filing, e-way bill generation and e-invoicing right with cloud-based GST compliance solutions in India. Goods and Services Tax (GST) rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.