The GST council yesterday (Jan 18th, 2018) announced, reduction of GST rate for housekeeping services from 18% to 5%. This comes as a big relief to Online housekeeping service providers (refer to the attachment for press release– item 5 )
Prior to this, the ecommerce platforms offering housekeeping services were mandated to dischanrge the GST liability of 18% on behalf of the service providers like electricians, plumbers etc making the services more expensive on the platform, as compared to offline services. This is because, services provided offline do not have to pay GST if the total revenue of the service provider is less that Rs. 20 lakhs and therefore there are no registration requirements.
In November 2017, the benefit of revenue threshold limit of Rs. 20 lakhs was extended to persons providing services through e-commerce platforms except housekeeping services provided by unregistered persons on online platforms as they were covered by another provision under the GST.
NASSCOM had raised the issue of disparity in GST levies on online housekeeping services vs offline services similar in nature, thereby putting online services at a disadvantage, at various levels including the GST council, Pre-budget consultation meet with Revenue secretary and his team, sectoral working groups for E-commerce sector and IT/ITeS sector and concerned officials in CBEC.
The announcement of rate reduction from 18% to 5% is aligned to what the Industry members had sought, in view that a complete exemption was not being considered. We are grateful to the Government for their support and our members for their inputs as we worked to resolve a key business survival concern.