Deciphering the GST Framework: Key Clarifications on (1) Passenger Transport and Motor Vehicle Renting Services (2) Reimbursement of Electricity Charges (3) Job Work on Barley Processing and (4) exemption from GST for DMFTs and CPWD

Circular No. Circular No. 206/18-HGST/2023/GST-II - Dated: 9-11-2023 - Clarifications regarding applicability of GST on certain services

The document titled "GST - States - Haryana SGST - Circular No. 206/18-HGST/2023/GST-II dated - 09 November 2023" provides clarifications regarding the applicability of GST on certain services in Haryana, India. This circular, issued by the Excise and Taxation Department of the Haryana Government, addresses several key issues:

1. Applicability of GST on Passenger Transport and Motor Vehicle Renting Services: The circular clarifies the concept of 'same line of business' in the context of passenger transport service and renting of motor vehicles, including leasing of motor vehicles without operators. It specifies that services of transport of passengers and renting of motor vehicles with operators, where the cost of fuel is included in the consideration charged from the service recipient, attract GST at the rate of 5% with input tax credit of services in the same line of business.

2. GST on Reimbursement of Electricity Charges: This point discusses the applicability of GST on electricity charges reimbursed by real estate companies, malls, airport operators, etc., to their lessees or occupants. The circular explains that electricity supply bundled with renting of immovable property and/or maintenance of premises forms a part of composite supply and shall be taxed accordingly. However, in cases where the electricity is supplied as a pure agent, it will not form part of the value of their supply.

3. GST Rate for Job Work on Barley Processing: The circular addresses whether job work for processing of “Barley” into “Malted Barley” attracts GST at 5% (as applicable to job work in relation to food and food products) or 18% (as applicable on job work related to the manufacture of alcoholic liquor for human consumption). It clarifies that the job work services in relation to the manufacture of malt attract a 5% GST rate.

4. GST Exemptions for District Mineral Foundations Trusts (DMFTs): The circular clarifies whether DMFTs, set up by State Governments, are considered Governmental Authorities and thus eligible for the same exemptions from GST as available to other Governmental Authorities.

5. GST Exemptions on Services and Supplies to CPWD: This section clarifies whether the supply of pure services and composite supplies by way of horticulture/horticulture works made to CPWD are eligible for exemption from GST. The circular affirms that such supplies are indeed exempt from GST under specified conditions.

These clarifications are crucial for understanding the GST framework's application in different scenarios and are especially relevant for stakeholders in the transport, real estate, agriculture, mining, and government sectors in Haryana. The implications of these clarifications can significantly impact the tax liability and compliance requirements of businesses and governmental bodies operating within these areas.

Full Text:

Circular No. Circular No. 206/18-HGST/2023/GST-II - Dated: 9-11-2023 - Clarifications regarding applicability of GST on certain services

Dated: 16-1-2024