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TMI BlogClarifications regarding applicable GST rates & exemptions on certain servicesX X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of State Tax, Maharashtra. Yours faithfully, (RAJEEV KUMAR MITAL) Commissioner of State Tax, Maharashtra State, Mumbai Circular No. 177/09/2022-TRU CBIC-190354/176/2022-TRU Government of India Ministry of Finance Department of Revenue (Tax Research Unit) ***** Room No. 146G, North Block, New Delhi, the 3rd August, 2022 To, The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/ Commissioner of Central Tax (All), The Principal Director Generals/ Director Generals (All) Madam/Sir, Subject: Clarifications regarding applicable GST rates exemptions on certain services reg. Representations have been received seeking clarification on the following issues: 1. Rate of GST applicable on supply of ice-cream by ice-cream parlors during the period from 01.07.2017 to 05.10.2021; 2. Applicability of GST on application fee charged for entrance or the fee charged for issuance of eligibility certificate for admission or for issuance of migration certificate by educational institutions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issues have been examined by GST Council in the 47th meeting held on 28th and 29th June, 2022. The issue-wise clarifications as recommended by the GST Council are below: 3. Rate of GST applicable on supply of ice-cream by ice-cream parlors during the period from 01.07.2017 to 05.10.2021 3.1 On the recommendation of the GST Council in its 45th meeting, it was clarified vide circular 164/20/2021-GST dated 06.10.2021 that ice cream parlours sell already manufactured ice- cream and they do not have a character of a restaurant and hence, ice cream sold by a parlour or any similar outlet attracts standard rate of GST @ 18% with ITC. 3.2 Representations have been received requesting that GST at 18% may be levied on supply of ice-cream by ice-cream parlors with effect from 06.10.2021. 3.3 It has been represented that ice cream parlors which paid GST @ 5% without ITC in view of prevailing doubt before the issuance of the Circular dated 6.10.2021 did not avail ITC and paid 5% in cash. Such ice-cream parlors have thus foregone significant ITC benefit. 3.4 Considering the overall circumstances of the case, it is clarified that past cases of payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the fee charged for issuance of migration certificates by educational institutions to the leaving or ex-students is covered by exemption under Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. 5. Whether storage or warehousing of cotton in baled or ginned form is covered under entry 24B of Notification No. 12/2017-Central Tax (Rate) which exempted services by way of storage and warehousing of raw vegetable fibres such as cotton before 18.07.2022. 5.1 Representations have been received regarding applicability of GST exemption on the service of storage or warehousing of cotton in baled or ginned form. 5.2 Prior to 18.07.2022, entry 24 B of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 exempted services by way of storage and warehousing of, inter alia, raw vegetable fibers such as cotton, flax, jute etc. Cotton Fiber glossary by barnhardtcotton.net defines cotton staple, virgin cotton or raw cotton as cotton fibers that are removed from the cotton seed by the gin. Further, CESTAT Chandigarh in the case of R.K. Sons vs CCE, Rohtak dated 14th July 2016 has observed as under: Cotton (with seeds) as pluck ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for making available a track and trace facility for locating goods brought for transhipment. 6.6 With respect to transit or transhipment of cargo to Nepal, specific regulations namely Transhipment of Cargo to Nepal under Electronic Cargo Tracking System Regulations, 2019 have been notified. It is relevant to mention here that as per these regulations also, the authorized carrier has to execute a general bond for an amount as directed by the proper officer. The authorized carrier also has to procure ECTS (Electronic Cargo Tracking System) from a bi-laterally appointed managed service provider. In order to discharge the bond, the proper officer of customs has to extract trip reports from the ECTS web application as proof of completion of transhipment. The reconciliation of transhipment of consignments shall be carried out on the basis of trip report, by the proper officer at the Ports of Kolkata, Haldia or Visakhapatnam, as the case may be, and then only the general bond submitted by the authorised carrier will be re-credited or discharged. 6.7 As can be seen from the above, the regulations governing transit / transhipment have to be followed in addition to the ensuring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.1 Representation has been received regarding the GST rate applicable on selling of space for advertisement in souvenirs published in the form of books by different institutions/organizations like educational institutions, social, cultural and religious organizations including clubs etc. 8.2 As per serial number (i) of entry 21 of notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 selling of space for advertisement in print media attracts GST @ 5%. The term print media has been defined in clause (zt) of notification No.12/2017-Central Tax (Rate) dated 28.06.2017 as under: print media means, - i. book as defined in sub-section (1) of section 1 of the Press and Registration of Books Act, 1867 (25 of 1867), but does not include business directories, yellow pages and trade catalogues which are primarily meant for commercial purposes; ii. . 8.3 Further, sub-section (1) of section 1 of the Press and Registration of Books Act, 1867 defines book as follows: Book includes every volume, part or division of a volume, and pamphlet, in any language and every sheet of music, map, chart or plan separately printed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 18 of notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 . On such rental services of goods carriages where the cost of fuel is in included in the consideration charged from the recipient of service, GST rate has been reduced from 18% to 12% with effect from 18.07.2022. Prior to 18.07.2022, it attracted GST at the rate of 18%. 10. Whether location charges or preferential location charges (PLC) collected in addition to the lease premium for long term lease of land constitute part of the lease premium or of upfront amount charged for long term lease of land and are eligible for the same tax treatment; 10.1 Representation has been received seeking clarification whether location charges or preferential location charges (PLC) collected in addition to the lease premium for long term lease of land constitute part of the lease premium or upfront amount charged for long term lease of land and are eligible for the same tax treatment. 10.2 As per entry 41 of the notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 upfront amount, which is defined as upfront amount (called as premium, salami, cost, price, development charges or by any other n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the vehicles which is not having Fastag. 12.2 Entry 23 of notification No.12/2017- Central Tax (Rate) dated 28th June, 2017 exempts service by way of access to a road or a bridge on payment of toll charges. 12.3 Ministry of Road Transport Highways (MORTH) vide circular dated 16.02.2021 has directed to collect additional amount from the users of the road to the extent of two times of the fees applicable to that category of vehicle which is not having a valid functional Fastag. 12.4 Essentially, the additional amount collected from the users of the road not having a functional Fastag, is in the nature of Toll Charges and should be treated as additional toll charges. 12.5 On a similar issue of collection of overloading charges in the form of a higher toll (2/4/6/7 times of the base rate of toll), it has already been clarified vide circular number 164/20/2021-GST dated 06.10.2021 , which was issued on the basis of recommendation of GST Council that overloading charges at toll plazas would get the same treatment as given to toll charges. 12.6 Therefore, it is clarified that additional fee collected in the form of higher toll charges from vehic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Goods and Services Tax Act, 2017 and accordingly does not attract GST. 14.4 However, it may be noted that any service provided for development of land, like levelling, laying of drainage lines (as may be received by developers) shall attract GST at applicable rate for such services. 15. Situations in which corporate recipients are liable to pay GST on renting of motor vehicles designed to carry passengers 15.1 In case of services provided by a non-body corporate to a body corporate by way of renting of any motor vehicle for transport of passengers, tax is required to be paid by the body corporate under RCM. 15.2 Representations have been received to clarify whether RCM is applicable on service of transportation of passengers (Heading 9964) or on renting of motor vehicle designed to carry passengers (Heading 9966). 15.3 Renting of motor vehicle with operator for transport of passengers falls under Heading 9966. According to the explanatory notes to heading 9966, the service covered here is renting of motor vehicle for transport of passengers for a period of time where the renter defines how and when the vehicles will be operated, dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w and when the vehicles will be operated, determining schedules, routes and other operational considerations. 16.4 In other words, the said exemption would apply to passenger transportation services by non-air conditioned contract carriages falling under Heading 9964 where according to explanatory notes, transportation takes place over pre-determined route on a pre-determined schedule. The exemption shall not be applicable where contract carriage is hired for a period of time, during which the contract carriage is at the disposal of the service recipient and the recipient is thus free to decide the manner of usage (route and schedule) subject to conditions of agreement entered into with the service provider. 17. Whether supply of service of construction, supply, installation and commissioning of dairy plant on turn-key basis constitutes a composite supply of works contract service and is eligible for concessional rate of GST prior to 18.07.2022. 17.1 Representation has been received seeking clarification regarding the applicable GST rate on service of construction, supply, installation and commissioning of a 2.00 LLPD dairy plant on turn-key basis. 17. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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