Amid the outrage over revised GST rates which came into effect from July 18, it is being claimed on social media that the centre has imposed 18% GST on crematorium services now. Slamming the alleged decision by the government, netizens are commenting that “the saying nothing is certain except death and taxes just reached another level”.
Newschecker found that the claim is not true. There is no GST on crematorium services. Though the tax rates on work contracts for crematoriums have increased from 12% to 18%.
Along with the ongoing protest by the Congress-led opposition against inflation and the recent levy of GST on certain items in the Parliament, the change in tax rates also led to a Twitter war between the BJP members and the opposition.
The central government is also being criticised for foisting GST on daily-use essentials and subsequent price rises. Following this, FM Sitharaman had to clarify that the mass consumption items such as pulses, wheat, rice, flour, and curd will not attract the 5% GST when sold loose, and not pre-packed or pre-labelled.
Are crematorium services taxable now? Did the GST council actually propose and approve a tax on crematorium services? To verify the veracity of the claim, we checked the official press release of the 47th GST Council meet uploaded on the website of the Press Information Bureau.
The release says that the GST rates on works contracts for roads, bridges, railways, metro, effluent treatment plant, crematoriums etc. have been rationalised from 12% to 18% to remove the inverted duty structure.
Notably, there was no mention of GST on crematorium services in the release.
What Is A Work Contract Under GST?
To understand what constitutes a ‘work contract’ under the GST regime, we looked up the Central Goods and Service Tax Act 2017. As per section 2 (119) of the CGST Act 2017, “works contract means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.”
Notably, the work contracts for structures meant for funeral, burial or cremation of deceased were earlier taxed at 12% which has recently been increased to 18%.
What Is Inverted Tax Structure?
As per Clear Tax, Inverted Tax Structure refers to a situation where the rate of tax on inputs purchased (i.e.GST rate paid on inputs received) is more than the rate of tax on outward supplies (i.e. GST rate payable on sales).
Clearly, an increase in the GST rates on “work contract” for crematorium has been misinterpreted as a hike in tax on crematorium services.
But, are crematorium services taxable under the GST Act, 2017? No, such services are exempted under the act.
As per Schedule 3 of the Act, services of funeral, burial, crematorium or mortuary including transportation of the deceased are included under “activities or transactions which shall be treated neither as a supply of goods nor a supply of services.”
Further, Government’s PIB Fact Check also termed the claim as “misleading.” In a tweet, dated July 20, 2022, PIB Fact Check stated “there is no GST on funeral, burial, crematorium, or mortuary services. In this reference GST @ 18% is only applicable for work contracts and not the services.”
The claims regarding the central government imposing GST on crematorium services are false. However, the government imposes GST on work contracts for crematoriums which has been hiked from 12% to 18% recently.
Result: Partly False
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