CBIC Invites Stakeholder Input on Harmonization of GST Rate Schedule on Services and the Classification of Services adopted for GST

As per Notification No. 12/2017-Central Tax dated June 28, 2017, as amended by Notification No. 78/2020-Central Tax dated October 15, 2020, taxpayers having turnover up to Rs. 5 Crore in the previous financial year are required to declare classification of services at a 4- digit level and those having turnover above Rs. 5 Crore at a 6-digit level.

Under GST, the Scheme of Classification of services adopted is based on UNCPC (UN Central Product Classification of Goods and Services). However, while the UNCPC adopts a 5 digit classification, the classification adopted for GST is a 4-digit classification with digits 99 pre-fixed to indicate that these are services. This scheme of classification has been annexed to the Rate Notification No. 11/2017-CT(R) dated June 28, 2017.

In the said Notification, the GST rate schedule specifying the applicable GST rates for different services does not mention the classification of services at the six digit level. Therefore, an attempt has been made to harmonize the GST Rate Schedule with the Classification of Services with a view to promote ease of doing business. The document annexed with this note (pages 1 to 74) is a self-contained draft schedule of GST rates on services, in which the service code (6-digit), the description of the service and the applicable rate, along with the condition applicable, are given together. Also, the numerous conditions specified in the existing rate notification have been standardized, coded and moved to a separate table which has made the main body of the notification easier to read.

All are requested to kindly provide feedback/ suggestions on the annexed draft schedule of GST rates on services latest by January 31, 2024. The same may be mailed at the email id js-tru2@gov.in.

The Draft rate schedule of services at 6 digit level of classification can be accessed at: https://old.cbic.gov.in/resources//htdocs-cbec/feedback-04012024.pdf