Till 30th June, 2017 services are taxed under different legislations like Service Tax Central & Luxury and Entertainment Tax by State Government. Post implementation of Goods & Service Tax, there is a paradigm shift in taxes levied on services in India. GST shall be levied on every taxable supply made by a taxable person in the taxable territory.
There can be two types of supplies either Inter-state or Intra-state. In case of Interstate supply of services, IGST shall be levied while for Intra-state supply of services CGST & SGST shall be levied. In order to determine that whether the supply is Inter-state or Intra-state, we have to check the place of supply provisions applicable for respective services. If Place of supply and Location of supplier is in same state then the supply shall be Intra-state supply, whereas, if Place of supply and Location of supplier is in different state or UT then it will be considered as Inter-state supply.
All types of services have been segregated in 4 tax rate categories of GST (5%, 12%, 18%, 28%) and has been assigned with a Service Accounting Code (SAC). Few services have been exempted under GST including services by an employee to employer, specified services provided by Central or State Government or Local Authority, renting of property for residential use, distribution of electricity, services by RBI etc.