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TMI BlogCirculation of Circulars on GST Acts/Rules issued by the Govt. of India, Ministry of Finance, Department of Revenue, New DelhiX X X X Extracts X X X X X X X X Extracts X X X X ..... dated 20.09.2021 Clarification on doubts related to scope of Intermediary 2 160/16/2021-GST dated 20.09.2021 Clarification in respect of certain GST related issues 3 161/17/2021-GST dated 20.09.2021 Clarification relating to export of services-condition (v) of section 2(6) of the IGST Act 2017 4 162/18/2021-GST dated 25.09.2021 Clarification in respect of refund of tax specified in section 77(1) of the CGST Act and section 19(1) of the IGST Act 5 163/19/2021-GST dated 06.10.2021 Clarification regarding GST rates classification (goods) based on the recommendations of the GST Council in its 45th meeting held on 17th September, 2021 at Lucknow 6 164/20/2021-GST dated 06.10.2021 Clarifications regarding applicable GST rates exemptions on certain services Yours faithfully Special C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definition of intermediary under IGST Act as well as under Service Tax law, it is evident that there is broadly no change in the scope of intermediary services in the GST regime vis- -vis the Service Tax regime, except addition of supply of securities in the definition of intermediary in the GST Law. 3 . Primary Requirements for intermediary services The concept of intermediary services, as defined above, requires some basic prerequisites, which are discussed below: 3.1 Minimum of Three Parties: By definition, an intermediary is someone who arranges or facilitates the supplies of goods or services or securities between two or more persons. It is thus a natural corollary that the arrangement requires a minimum of three parties, two of them transacting in the supply of goods or services or securities (the main supply) and one arranging or facilitating (the ancillary supply) the said main supply. An activity between only two parties can, therefore, NOT be considered as an intermediary service. An intermediary essentially arranges or facilitates another supply (the main supply ) between two or more other persons and, does not himself provide the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ither fully or partly, to one or more sub-contractors. Such sub-contractor provides the main supply, either fully or a part thereof, and does not merely arrange or facilitate the main supply between the principal supplier and his customers, and therefore, clearly is not an intermediary. For instance, A and B have entered into a contract as per which A needs to provide a service of, say, Annual Maintenance of tools and machinery to B . A subcontracts a part or whole of it to C . Accordingly, C provides the service of annual maintenance to A as part of such sub-contract, by providing annual maintenance of tools and machinery to the customer of A , i.e. to B on behalf of A . Though C is dealing with the customer of A , but C is providing main supply of Annual Maintenance Service to A on his own account, i.e. on principal to principal basis. In this case, A is providing supply of Annual Maintenance Service to B , whereas C is supplying the same service to A . Thus, supply of service by C in this case will not be considered as an intermediary. 3.6 The specific provision of place of supply of intermediary services under section 13 of the IGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain supply of insurance claims processing service is between P and R , while Q is merely arranging or facilitating the supply of services between P and R , and not himself providing the main supply of services. Accordingly, in this case, Q acts as an intermediary as per definition of sub-section (13) of section 2 of the IGST Act. Illustration 4 A is a manufacturer and supplier of computers based in USA and supplies its goods all over the world. As a part of this supply, A is also required to provide customer care service to its customers to address their queries and complains related to the said supply of computers. A decides to outsource the task of providing customer care services to a BPO firm, B . B provides customer care service to A by interacting with the customers of A and addressing / processing their queries / complains. B charges A for this service. B is involved in supply of main service customer care service to A , and therefore, B is not an intermediary. 5. The illustrations given in para 4 above are only indicative and not exhaustive. The illustrations are also generic in nature and should not be interpret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier. Doubts have been raised seeking following clarification: 1. Which of the following dates are relevant to determine the 'financial year' for the purpose of section 16(4): (a) date of issuance of debit note, or (b) date of issuance of underlying invoice. 2. Whether any availment of input tax credit, on or after 01.01.2021, in respect of debit notes issued either prior to or after 01.01.2021, will be governed by the provisions of the amended section 16(4), or the amended provision will be applicable only in respect of the debit notes issued after 01.01.2021? 1. With effect from 01.01.2021, section 16(4) of the CGST Act, 2017 was amended vide the Finance Act, 2020, so as to delink the date of issuance of debit note from the date of issuance of the underlying invoice for purposes of availing input tax credit. The amendment made is shown as below: A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f furnishing of FORM GSTR-3B for the month of September, 2021 or furnishing of the annual return for FY 2020-21, whichever is earlier. 2. Whether carrying physical copy of invoice is compulsory during movement of goods in cases where suppliers have issued invoices in the manner prescribed under rule 48 (4) of the CGST Rules, 2017 (i.e. in cases of e-invoice). 1. Rule 138A (1) of the CGST Rules, 2017 inter-alia, provides that the person in charge of a conveyance shall carry- (a) the invoice or bill of supply or delivery challan, as the case may be; and (b) a copy of the e-way bill or the e-way bill number, either physically or mapped to a Radio Frequency Identification Device embedded on to the conveyance in such manner as may be notified by the Commissioner. 2. Further, rule 138A (2) of CGST Rules, after being amended vide notification No. 72/2020-Central Tax dated 30.09.2020, states that I n case, invoice is issued in the manner prescribed under sub-rule (4) of rule 48, the Quick Reference (QR) code having an embedded Invoice Reference Number (IRN) in it, may be produced electronically, for verification by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation or which are not covered under Second Schedule to the Customs Tariff Act, 1975, would not be covered by the restriction imposed under the first proviso to section 54(3) of the CGST Act for the purpose of availment of refund of accumulated ITC . 2. It is requested that suitable trade notices may be issued to publicize the contents of this Circular. 3. Difficulty, if any, in the implementation of this Circular may be brought to the notice of the Board. Hindi version will follow. (Sanjay Mangal) Principal Commissioner Circular No. 161/17/2021-GST F. No. CBIC-20001/8/2021 GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing ****** New Delhi, dated the 20th September, 2021 To The Pr. Chief Commissioners / Chief Commissioners / Principal Commissioners / Commissioners of Central Tax (All) The Principal Directors General / Directors General (All) Madam / Sir, Subject: Clarification relating to export of services-condition (v) of section 2(6) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritory, then such establishments shall be treated as establishments of distinct persons. As per the above Explanation, an establishment of a person in India and another establishment of the said person outside India are considered as establishments of distinct persons. 3.3 Reference is also invited to the Explanation 2 of Section 8 of IGST Act, which is reproduced below: Explanation 2. A person carrying on a business through a branch or an agency or a representational office in any territory shall be treated as having an establishment in that territory. 3.4 Reference is also invited to the definition of person as provided under CGST Act 2017, made applicable to IGST Act vide section 2(24) of IGST Act 2017. Person has been defined under sub-section (84) of the section 2 of the CGST Act 2017, as under: (84) person includes- (a) an individual; (b) a Hindu Undivided Family; (c) a company; (d) a firm; (e) a Limited Liability Partnership; (f) an association of persons or a body of individuals, whether incorporated or not, in India or outside India; (g) any corporation establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said country. 4.3. In view of the above, it can be stated that supply of services made by a branch or an agency or representational office of a foreign company, not incorporated in India, to any establishment of the said foreign company outside India, shall be treated as supply between establishments of distinct persons and shall not be considered as export of services in view of condition (v) of sub-section (6) of section 2 of IGST Act. Similarly, any supply of service by a company incorporated in India to its branch or agency or representational office, located in any other country and not incorporated under the laws of the said country, shall also be considered as supply between establishments of distinct persons and cannot be treated as export of services. 4.4 From the perusal of the definition of person under sub-section (84) of section 2 of the CGST Act, 2017 and the definitions of company and foreign company under Section 2 of the Companies Act, 2013, it is observed that a company incorporated in India and a foreign company incorporated outside India, are separate person under the provisions of CGST Act and accordingly, are separate legal entities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect Taxes and Customs GST Policy Wing **** New Delhi, dated the 25th September, 2021 To, The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/ Commissioners of Central Tax (All) The Principal Directors General/ Directors General (All) Madam/Sir, Subject: Clarification in respect of refund of tax specified in section 77(1) of the CGST Act and section 19(1) of the IGST Act -Reg Representations have been received seeking clarification on the issues in respect of refund of tax wrongfully paid as specified in section 77(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act ) and section 19(1) of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as IGST Act ). In order to clarify these issues and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the CGST Act, hereby clarifies the issues detailed hereunder: 2.1 Section 77 of the CGST Act, 2017 reads as follows: 77. Tax wrongfully co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the term subsequently held in section 77 of CGST Act, 2017 or under section 19 of IGST Act, 2017 covers both the cases where the inter-State or intra-State supply made by a taxpayer, is either subsequently found by taxpayer himself as intra-State or inter-State respectively or where the inter-State or intra-State supply made by a taxpayer is subsequently found/ held as intra-State or inter-State respectively by the tax officer in any proceeding. Accordingly, refund claim under the said sections can be claimed by the taxpayer in both the above mentioned situations, provided the taxpayer pays the required amount of tax in the correct head. 4. The relevant date for claiming refund under section 77 of the CGST Act/ Section 19 of the IGST Act, 2017 4.1 Section 77 of the CGST Act and Section 19 of the IGST Act, 2017 provide that in case a supply earlier considered by a taxpayer as intra-State or inter-State, is subsequently held as inter-State or intra-State respectively, the amount of central and state tax paid or integrated tax paid, as the case may be, on such supply shall be refunded in such manner and subject to such conditions as may be prescribed. In ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sl.no. Scenario Last date for filing the refund claim 1 Having realized on his own that the said transaction is an inter-State supply, A paid IGST in respect of the said transaction on 10.05.2021. Since A has paid the tax in the correct head before issuance of notification No. 35/2021-Central Tax, dated 24.09.2021, the last date for filing refund application in FORM GST RFD-01 would be 23.09.23 ( two years from date of notification ) 2 Having realized on his own that the said transaction is an inter-State supply, A paid IGST in respect of the said transaction on 10.11.2021 i.e. after issuance of notification No. 35/2021-Central Tax dated 24.09.2021 Since A has paid the correct tax on 10.11.2021, in terms of rule 89 (1A) of the CGST Rules, the last date for filing refund application in FORM GST RFD-01 would be 09.11.2023 (two years from the date of payment of tax under the correct head, i.e. integrated tax) 3 Proper officer or adjudication authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department of Revenue (Tax Research Unit) ***** North Block, New Delhi Date: 6th October, 2021 To, Principal Chief Commissioners/ Principal Director Generals, Chief Commissioners/ Director Generals, Principal Commissioners/ Commissioners of Central Excise Central Tax(All), Madam/ Sir, Subject: Clarification regarding GST rates classification (goods) based on the recommendations of the GST Council in its 45th meeting held on 17th September, 2021 at Lucknow reg. Based on the recommendations of the GST Council in its 45th meeting held on 17th September, 2021, at Lucknow, clarification, with reference to GST levy, related to the following are being issued through this circular: i. Fresh vs dried fruits and nuts; ii. Classification and applicable GST rates on Tamarind seeds; iii. Coconut vs Copra; iv. Classification and applicable GST rate on Pure henna powder and leaves, having no additives; v. Scented sweet supari and flavored and coated illaichi; vi. Classification of Brewers' Spent Grain (BSG), Dried Distillers Grains with Soluble [DDGS] and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heading 0801 and 0802 attract GST at the rate of 5%/12% as specified in the respective rate Schedules. 4. Applicability of GST on tamarind seeds: 4.1 Representations have been received seeking clarification regarding classification and applicable GST rates on tamarind seeds. The dispute is in classification of tamarind seeds between tariff heading 1207 and 1209. 4.2 As per general Explanatory Notes to HS 2017, heading 1209, covering seeds, fruit and spores, of a kind used for sowing, covers tamarind seeds. As per Chapter note 3 to Chapter 12, for the purposes of heading 1209, beet seeds, grass and other herbage seeds, seeds of ornamental flowers, vegetable seeds, seeds of forest trees, seeds of fruit trees, seeds of vetches (other than those of the species Vicia faba) or of lupines are to be regarded as seeds of a kind used for sowing . Thus, tamarind seeds, even if used for any purpose other than sowing, is liable to be classified under heading 1209 and hitherto attracted nil GST rate, irrespective of its use (for the period 01.07.2017 to 30.09.2021). 4.3 The GST council in its 45th meeting recommended GST rate on seeds, falling under heading 1209, m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is classifiable under tariff item 1404 90 90 and shall attract GST rate of 5% (S. No. 78 of schedule I of notification No. 1/2017-Central Tax (Rate) dated 28.06.2017). 6.4. Further, the GST rate on mehndi paste in cones falling under heading 1404 and 3305 shall be 5% (S. No. 78A of schedule I of notification No. 1/2017-Central Tax (Rate) dated 28.06.2017). 7. Applicability of GST on scented sweet supari flavored and coated illaichi: 7.1 Representations have been received seeking clarification regarding classification and applicable GST rates on flavored and coated illaichi, and scented sweet supari. 7.2 Scented sweet supari falls under tariff item 2106 90 30 as Betel nut product known as Supari and attracts GST rate of 18% vide entry at S. No. 23 of Schedule III of notification No. 1/2017-Central Tax (Rate) dated 28.6.2017. 7.3 Flavored and coated illaichi generally consists of Cardamom Seeds, Aromatic Spices, Silver Leaf, Saffron, Artificial Sweeteners. It is distinct from illaichi or cardamom (which falls under heading 0908). It is clarified that flavored and coated illaichi is a value added product and falls under sub-heading 2106. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 65 of Second Schedule of Notification 1/2017- Central Tax (Rate) dated 28.6.2017 refers to the note 4 to Chapter 30 of the First schedule of the Customs Tariff Act, 1975 while mentioning an illustrative list. Certain representations were received seeking clarification on the applicable rate of goods falling under heading 3006 that are not specifically mentioned in the Entry at S. No. 65 of Schedule II of notification No. 1/2017-Central Tax (Rate) dated 28.6.2017. 9.3 Note 4 to Chapter 30 of the First schedule of the Custom Tariff Act, 1975 reads as follows: (a) sterile surgical catgut, similar sterile suture materials (including sterile absorbable surgical or dental yarns) and sterile tissue adhesives for surgical wound closure; (b) sterile laminaria and sterile laminaria tents; (c) sterile absorbable surgical or dental haemostatics sterile surgical or dental adhesion barriers, whether or not absorbable; (d) opacifying preparations for X-ray examinations and diagnostic reagents designed to be administered to the patient, being unmixed products put up in measured doses or products consisting of two or more ingredients which have been mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficate, issued by the Directorate General of Hydrocarbons (DGH) on each inter-State stock transfer of goods imported at concessional GST rate for petroleum operations 11.1 Notification No. 3/2017-Central Tax (Rate) prescribes concessional rate of 5% for specified goods which are used in connection with specified petroleum operations. Condition 1 (d) in notification No. 03/2017-Central Tax dated 28.06.2017 prescribes that whenever goods so supplied are transferred to other licensee or sub-contractor a certificate from Directorate General of Hydrocarbons (DGH) is to be produced that the goods may be transferred to the transferee . 11.2. As per Section 7 read with Schedule-I of the CGST Act 2017, inter-state stock transfer between distinct persons (establishment of same person located in two different states) is considered as supply of goods. 11.3. Representations have been received seeking clarification whether the original/ import Essentiality certificate can be used for such inter-state stock transfers or a fresh Essentiality certificate would be required for each inter-state stock transfer as it is being treated as supply subject to IGST. 11.4 GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned in the notification No. 11/2017-Central Tax (Rate), dated 28th June, 2017, the value of supply of goods for the purposes of this entry shall be deemed as seventy per cent. of the gross consideration charged for all such supplies, and the remaining thirty per cent. of the gross consideration charged shall be deemed as value of the said taxable service. This mechanism for valuation of supply was recommended by the Council considering that it adequately represented the value of goods and services involved in the supply. 13.3 The GST Council has now decided to clarify that GST on such specified Renewable Energy Projects can be paid in terms of the 70:30 ratio for goods and services, respectively, for the period of 1st July, 2017 to 31st December, 2018, in the same manner as has been prescribed for the period on or after 1st January, 2019, as per the explanation in the Notification No.24/2018 dated 31st December, 2018. However, it is specified that, no refunds will be granted if GST already paid is more than the amount determined using this mechanism. 14. Applicability of GST rates on Fibre Drums, whether corrugated or non-corrugated 14.1 Hitherto, corrug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce cream by ice cream parlors, 3. Coaching services to students provided by coaching institutions and NGOs under the central sector scheme of Scholarships for students with Disabilities , 4. Satellite launch services provided by NSIL. 5. Overloading charges at toll plaza, 6. Renting of vehicles by State Transport Undertakings and Local Authorities, 7. Services by way of grant of mineral exploration and mining rights attracted GST, 8. Admission to amusement parks having rides etc. , 9. Services supplied by contract manufacture to brand owners or others for manufacture of alcoholic liquor for human consumption. 2. The issues have been examined by GST Council in the 45rd meeting of the Council held on 17th September, 2021. The issue-wise clarifications are given below: 3. Services by cloud kitchens/central kitchens: 3.1 Representations have been received requesting for clarification regarding the classification and rate of GST on services rendered by Cloud kitchen or Central Kitchen. 3.2 The word restaurant service is defined in Notification No. 11/2017 CTR as below: - Restaurant service means ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lor or any similar outlet would attract GST at the rate of 18%. 5. Coaching services supplied by coaching institutions and NGOs under the central sector scheme of Scholarships for students with Disabilities 5.1 Representations have been received seeking clarification regarding applicability of GST on free coaching services provided by coaching institutions and NGOs under the central scheme of Scholarships for students with Disabilities where entire expenditure is provided by Government to coaching institutions by way of grant in aid. 5.2 In this regard, it is to mention that entry 72 of notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017, exempts services provided to the Central Government, State Government, Union territory administration under any training programme for which total expenditure is borne by the Central Government, State Government, Union territory administration. 5.3 The scope of this entry is wide enough to cover coaching services provided by coaching institutions and NGOs under the central scheme of Scholarships for students with Disabilities where total expenditure is borne by the Government by way of funding to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... takings and Local Authorities 8.1 Representations have been received seeking clarification regarding eligibility of the service of renting of vehicles to State Transport Undertakings (STUs) and Local Authorities for exemption from GST under notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Sl. No. 22 of this notification exempts services by way of giving on hire (a) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or (aa) to a local authority, an Electrically Operate vehicle meant to carry more than twelve passengers . 8.2 This issue has arisen in the wake of ruling issued by an Authority for Advance Ruling that the entry at Sl. No. 22 of notification No. 12/2017-Central Tax (Rate) exempts services by way of giving on hire vehicles to a State Transport Undertaking or a local authority and not renting of vehicles to them. The ruling referred to certain case laws pertaining to erstwhile positive list based service tax regime. 8.3 It is relevant to note in this context that Schedule II of CGST Act, 2017 declares supply of any goods without transfer of title as supply of service even if right to use i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide Order dated 5.11.2019 in the case of M/s Penguin Trading and Agencies Limited that grant of mining lease was taxable @ 18% prior to 01.01.2019. The Appellate Authority in this case observed that GST rate applicable against Sl. No. 17 item (viii) of Notification No. 11/2017-Central Tax (Rate) prior to 01.01.2019 was not implementable. Unlike leasing or renting of goods, there are no underlying goods in case of leasing of mining area. The rate prescribed for goods cannot be made applicable to leasing of mining area, which confers the right to extract and appropriate minerals. The mining lease by Government, not being a lease of any goods, cannot attract the rate applicable to sale of like goods. Appellate Authority for Advance Ruling, Odisha has further held that the amendment carried out vide Notification No. 27/2018-Central Tax (Rate), dated 31.12.2018,which restricted the same rate as applicable to supply of goods involving transfer of title in goods only to leasing or renting of goods was to clarify the legislative intent as well as to resolve the unintended interpretation. It is a settled law that interpretation which defeats the intention of legislature cannot be adopted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larification regarding applicable rate of GST on services provided by Indoor Amusement Parks/Family Entertainment Centers, and scope of the word amusement park under entry 34(iii) of Notification No. 11/2017-CTR. 10.2 Entry 34(iii) notification No.11/2017-CTR, prior to 01.10.2021, prescribed 18% GST on the services by way of admission to amusement parks including theme parks, water parks, joy rides, merry-go rounds, go-carting and ballet. On the other hand, Entry No. 34(iiia) in Notification No. 11/2017- CT(R) dated 28.06.2017 prescribed GST rate of 28% on the services by way of admission to entertainment events or access to amusement facilities including casinos, race club, any sporting event such as Indian Premier League and the like. 10.3 On the recommendations of the Council, it is clarified that 28% rate [entry 34 (iiia)] applies on admission to a place having casino or race club [even if it provides certain other activities] or admission to a sporting event like IPL. On the other hand, Entry 34 (iii), having a rate of 18%, covers all other cases of admission to amusement parks, or theme park etc or any place having joy rides, merry- go rounds, go- carting etc, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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