Busting the fake news around GST on funeral services

Democracy allows for diversity of thoughts and no democracy other than India has adopted this principle better. However, the diversity of thoughts needs to be limited to the diversity of opinions and not facts. Apparently, even Facts are interpreted in such a manner that it has the potential to create harakiri in the country. The recent controversy about GST on funeral/crematorium services was one such example.

Fake news about GST on crematorium services

As soon as the rate change in GST was announced by the Modi government, it became an opportunity for people to spread negativity surrounding the reform. Jairam Ramesh, an erudite Minister of the UPA era levelled charges on the Modi government for imposing GST on crematorium services.

Shailendra Choudhary, the National media coordinator of the Congress party also amplified his concerns about the unverified rumours.

Later, various other individuals supposed to fact-check before putting forward their concerns too became willing participants.

https://twitter.com/kappansky/status/1549671575158673410

AIR tweet was misrepresented

All of these assertions were based on one tweet by All India Radio (AIR). On June 29, the radio broadcaster tweeted about the rate hike on work contracts for roads, bridges, railways, metro, effluent treatment plants, and crematoriums. The tax rate was increased from 12 per cent to 18 per cent.

Rate on construction has been increased

Notice carefully, the rate has been increased for work contracts and not crematorium services. Work contract in fact can be roughly translated to be a part of the construction sector. It has in fact been defined in Section 2(119) of the CGST Act, 2017. The Section reads as, “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.”

In other words, if someone is trying to form a new crematorium, or alter the design of an existing one, trying to add new pieces of equipment to the place, or doing stuff like modification, improvement, or any other change which could alter the look of the particular area without altering the core function of the place, which is giving respect to the deceased soul, only then 18 per cent tax rate will be charged. This is nothing new and was never a bone of contention in the past as the earlier tax rate was 12 per cent.

Crematorium services are free of GST

Moreover, the astounding fact is that Crematorium services are, in fact, not subject to any GST. Section 7 (4) of Schedule III of the GST Act, 2017 exempts these services from GST.

It is amply clear that facts do not support any kind of rumours about GST on crematoriums.

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