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TMI BlogRECENT GST CLARIFICATIONS – PART 7X X X X Extracts X X X X X X X X Extracts X X X X ..... RECENT GST CLARIFICATIONS – PART 7 - By: - Dr. Sanjiv Agarwal - Goods and Services Tax - GST - Dated:- 29-8-2024 - Post 53rd GST Council meeting held on 22.06.2024 , CBIC has issued 23 Circulars bearing Nos. 207 to 229 , all dated between 26.06.2024 and 15.07.2024 clarifying taxability, place of supply, time of supply etc on various issues relating to goods and services. This concluding Part-7 of the Article offers the gist of Circular No. 227 , 228 and 229 which are on the following topics: Circular No. / date In relation to Circular No. 227/21/2024-GST dated 11.07.2024 Processing of refund claims of Canteen Stores Department (CSD) Circular No. 228/22/2024-GST dated 15.07.2024 CBIC clarifications on applicability of GST Circular No. 229/23/2024-GST dated 15.07.2024 CBIC clarifications on GST Rates and Classification of Goods Processing of refund claims of Canteen Stores Department (CSD) - Circular No. 227/21/2024-GST dated 11.07.2024 CBIC has issued revised procedure for electronic submission and processing of refund application by Canteen Store Department (CSD), in accordance with section 55 of CGST Act, in supersession of Circular No. 60/34/2018-GST dated 04.09.2018 . In order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to enable such CSD to file application for refund electronically, a new functionality has been made available on the common portal which allows CSD to apply for refund by filing an application electronically on the common portal. A new rule 95B and FORM GST RFD-10A have been inserted in CGST Rules vide Notification No. 12/2024-Central Tax dated 10.07.2024. This inter alia, include: Filing of refund application Filing of refund claim by CSD Relevant date for filing of refund Processing of refund claim Sanction of refund claim Proper officer shall process the refund claim filed by the CSD in a manner similar to the refund claims filed in FORM GST RFD-01 under the provisions of rule 89 . Proper officer while processing the refund application shall validate the GSTIN details of the CSD on the common portal to ascertain whether all the returns in FORM GSTR-1 and FORM GSTR-3B , which were due to be furnished on or before the date on which the refund application is being filed, have been filed. The proper officer may scrutinize the details contained in FORM RFD-10A , FORM GSTR-3B and FORM GSTR-2B , for processing the said refund claim. Proper officer shall also verify whether the details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the invoices for which refund has been claimed by the CSD, have been furnished by the concerned supplier in his details of outward supply in FORM GSTR-1 and the said supplier has furnished his return in FORM GSTR-3B for the concerned tax period. Proper officer shall ensure that the amount of refund sanctioned is not more than 50% of the central tax, state tax, Union territory tax and integrated tax paid on the supplies received by CSD. Invoices uploaded by the CSD while filing will be validated on the portal with FORM GSTR 2B of the applicant and only the validated invoices will be allowed in the application. Proper officer shall scrutinize the application with respect to completeness and eligibility of the refund claim to his satisfaction and issue the order in FORM GST RFD-06 accordingly. The proper officer shall also upload a detailed speaking order along with the said order in FORM GST RFD-06 . Circular No. 60/34/2018-GST dated 04.09.2018 shall continue to apply for all refund applications filed manually before the amendments in CGST Rules mentioned and before the said functionality being made available on the common portal. CBIC clarifications on applicability of GST - Cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular No. 228/22/2024-GST dated 15.07.2024 CBIC has issued clarifications on applicability of GST on issues relating to certain services, based on the recommendations of the 53 rd GST Council in its meeting held on 22 nd June, 2024 . These are on the following: GST exemption on the outward supplies made by the Indian Railways. GST exemption on the transactions between Special Purpose Vehicles (SPVs) and Indian Railways. Applicability of GST on the statutory collections made by RERA in accordance with the Real Estate (Regulation and Development) Act, 2016. Applicability of GST on the incentive amount shared by acquiring bank with other stakeholders in the digital payment ecosystem under the notified Incentive Scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions. GST liability on the reinsurance of specified general and life insurance schemes. GST liability on the reinsurance of insurance schemes for which total premium is paid by the Government. Applicability of GST on retrocession services. GST liability on certain accommodation services. Services relating to Railways Based on the recommendations of the 53 rd GST Council in its meeting held on 22 nd June, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 024 , CBIC has issued clarification in relation to Ministry of Railways / Indian Railways: GST exemption on the outward supplies made by the Indian Railways / MOR In the 52 nd GST Council meeting held on 07.10.2023 , all supplies of goods and services made by Indian Railways were brought under Forward Charge Mechanism and consequently exemptions that were available were withdrawn vide Notification No.13/2023-CT(R) dated 19.10.2023 w.e.f. 20.10.2023. The GST Council in 53 rd meeting recommended to exempt the services provided by Indian Railways to general public viz., sale of platform tickets, facility of retiring rooms / waiting rooms, cloak room services and battery-operated car services. The supply of services made between various zones / divisions under Indian Railways have been exempted and Notification No. 04/2024-CT(R) dated 12.07.2024 had been issued in this regard effective from 15.07.2024. GST Council also recommended to regularize the GST liability for the intervening period i.e. from 20.10.2023 to 14.07.2024 on 'as is where is' basis. GST on the services provided by Ministry of Railways (Indian Railways) to general public viz., sale of platform tickets, facility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of retiring rooms, cloak room services and battery-operated car services and supply of services made between various zones/ divisions under Ministry of Railways (Indian Railways) stands regularized on 'as is where is' basis from 20.10.2023 to 14.07.2024. GST exemption on the transactions between Special Purpose Vehicles (SPVs) and Indian Railways GST Council has recommended to exempt the supply of service by SPVs to Ministry of Railways (Indian Railways) by way of allowing Indian Railways to use the infrastructure built and owned by SPVs during the concession period against consideration and maintenance services supplied by Ministry of Railways (Indian Railways) to SPVs from GST. This is notified vide Notification No. 4/2024- CT(R) dated 12.07.2024. Such transactions of the past period from 01.07.2017 to 14.07.2024 have also been regularized on 'as is where is' basis. GST on the supply of services by SPVs to Ministry of Railways (Indian Railways) by way of allowing it to use infrastructure built and owned by them during the concession period against consideration and maintenance services supplied by Ministry of Railways (Indian Railways) to SPVs in relation to such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use of infrastructure built and owned by SPVs during the concession period against consideration is also regularized for the period from 01.07.2017 to 14.07.2024 on 'as is where is' basis. GST on collections made by RERA CBIC has clarified applicability of GST on the statutory collections made by RERA in accordance with the Real Estate (Regulation and Development) Act, 2016 based on 53 rd meeting of GST Council held on 22.06.2024 RERA is a 'governmental authority' as per the definition in the exemption notification No. 12/2017-CT(R) dated 28.06.2017 and is covered under the scope of entry at SI. No. 4 of notification No. 12/2017-CT(R) dated 28.06.2017 . GST Council in its 53rd meeting has recommended to clarify that statutory collections made by RERA are covered under the SI. No. 4 of notification No. 12/2017-CT(R) dated 28.06.2017 . It has been clarified that statutory collections made by RERA are covered under the SI. No. 4 of notification No. 12/2017-CT(R) dated 28.06.2017 . GST on incentives in digital payment eco system CBIC has clarified on applicability of GST on the incentive amount shared by acquiring bank with other stakeholders in the digital payment ecos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ystem under the notified Incentive Scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions, based on 53 rd GST Council meeting recommendations. It was clarified vide Circular No. 190/02/2023-GST dated 13.01.2023, that incentives paid by MeitY to acquiring banks under the digital payments scheme are in the nature of subsidy and thus, not taxable. The share of incentive paid by the acquiring bank to the issuer bank and further shared by the issuer bank to the Payer PSPs and the UPI app are decided by the National Payments Corporation of India (NPCI) in consultation with participating banks. Payer PSPs may choose to further share this incentive with Third Party App Providers (TPAP). The proportion of the incentive shared by Payer PSPs with TPAPs is not being decided by NPCI in consultation with the participating banks for Financial Years 2021-22 and 2022-23 and was determined by the business agreement between the Payer PSPs and TPAP. The GST council in the 53 rd meeting has clarified that further sharing of the incentive amount by the acquiring bank with other stakeholders, up to the point where the incentive is distributed in the proportion and manner as decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by NPCI in consultation with the participating banks under the notified Incentive Scheme, is in the nature of a subsidy and thus, not taxable. CBIC has therefore, clarified that further sharing of the incentive amount by the acquiring bank with other stakeholders, up to the point where the incentive is distributed in the proportion and manner as decided by NPCI in consultation with the participating banks under the notified Incentive Scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions, is in the nature of a subsidy and is thus, not taxable. CBIC clarifications on reinsurance related services Based on 53 rd GST Council meetings recommendation, CBIC has clarified as follows in relation to reinsurance services: GST liability on the reinsurance of specified general and life insurance schemes The GST council recommended to regularize the GST liability on reinsurance of exempt general insurance and life insurance schemes for the past period, i.e. from 01.07.2017 to 24.01.2018, on 'as is where is' basis. GST liability on the services by way of reinsurance of the insurance schemes specified in SI. Nos. 35 and 36 of notification No. 12/2017-CT(R) dated 28. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06.2017 has been regularized for the period from 01.07.2017 to 24.01.2018 on 'as is where is' basis. GST liability on the reinsurance of insurance schemes for which total premium is paid by the Government Services provided to Central / State / UT Government under any insurance scheme for which total premium is paid by the Central / State / UT Government are exempt from GST under SI. No. 40 of notification No. 12/2017- CT(R) dated 28.06.2017 and vide entry at SI. No. 36A of the said notification, re-insurance of the aforesaid insurance schemes has been prospectively exempted w.e.f. 27.07.2018. (i.e., not for period 1.7.2017 to 26.07.2018). The GST Council has recommended to regularize the GST liability on such reinsurance of Government sponsored insurance schemes for the past period, i.e. from 01.07.2017 to 26.07.2018, on 'as is where is' basis. Thus, it has been clarified that GST liability on the services by way of reinsurance of insurance services covered under SI. No. 40 of notification No. 12/2017-CT(R) dated 28.06.2017 is regularized for the period from 01.07.2017 to 26.07.2018 on 'as is where is' basis. Applicability of GST on retrocession services As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the IRDAI (Re-insurance) Regulations, 2018, 'Retrocession' means a re-insurance transaction whereby a part of assumed reinsured risk is further ceded to another Indian Insurer or a CBR (Cross Border Re-insurer). Accordingly, the GST Council has recommended to clarify that reinsurance includes retrocession services. It has been clarified that the term 'reinsurance' as mentioned in SI. No. 36A of Notification No. 12/2017-CT(R) dated 28.06.2017 includes 'retrocession' services. Exemption to Accommodation Services Based on recommendation of 53 rd GST Council meeting CBIC has clarified on GST liability on certain accommodation services as follows: The GST Council recommended to exempt the supply of accommodation services having value of supply less than or equal to twenty thousand rupees per person per month provided that the accommodation service is supplied for a minimum continuous period of ninety days. This has been notified vide Notification No. 4/2024-CT(R) dated 12.07.2024 w.e.f. 15.07.2024. The benefit has also been extended on 'as is where is' basis for the past period cases from 01.07.2017 to 14.07.2024 provided that the value of supply of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccommodation services supplied was less than or equal to twenty thousand rupees per person per month and that the accommodation service was supplied for a minimum continuous period of ninety days. GST liability on the supply of accommodation services is regularized on 'as is where is' basis for the period from 01.07.2017 to 14.07.2024 where value of supply of the accommodation service is less than or equal to twenty thousand rupees per person per month and the said accommodation service was supplied for a minimum continuous period of ninety days. CBIC clarifications on GST Rates and Classification of Goods - Circular No. 229/23/2024-GST dated 15.07.2024 CBIC has issued clarification regarding GST rates classification of (goods) based on the recommendations of the GST Council in its 53rd meeting held on 22nd June, 2024. These are on the following issues: Clarification regarding GST rate on Solar Cookers Solar cookers that work on dual energy of solar energy and grid electricity are appropriately classifiable under heading 8516 and already attract a GST rate of 12% vide SI. No. 201A of Schedule II of Notification No. 1/2017-Central Tax (Rate) dated the 28th June, 2017 . Clari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication regarding GST rate on Fire Water Sprinklers All types of sprinklers, including fire water sprinklers attract GST at the rate of 12% vide SI. No. 195 B of Schedule II of Notification No. 1/2017-Central Tax (Rate) dated the 28th June, 2017 . Clarification regarding GST rate on parts of Poultry-keeping machinery Parts of Poultry-keeping machinery are classifiable under tariff item 8436 91 00 and attract GST at the rate of 12% vide SI. No. 199 of Schedule II of Notification No. 1/2017-Central Tax (Rate), dated the 28th June, 2017. This will include 'parts' of Poultry-keeping machinery. Clarification regarding the scope of expression 'pre-packaged and labelled' for supply of agricultural farm produce The definition of 'pre-packaged and labelled' in notification No. 1/2017-Central Tax (Rate) and notification No. 2/2017-Central Tax (Rate), both dated the 28th June, 2017 , has been amended to exclude the supply of agricultural farm produce in package(s) of commodities containing quantity of more than 25 kilogram or 25 litre from the scope of 'pre-packaged and labelled'. Consequently, supply of agricultural farm produce in package (s) containing quan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tity of more than 25 kilogram or 25 litre will not attract GST levy of 5%. Clarification regarding supplies of goods made to or by agency engaged by Government The issues for the past period from 01.07.2017 up to 17.07.2022 are hereby regularized on as is where is basis for supplies made to or by any agency engaged by Union Government or State Government/Union Territory for procurement and sale pulses and cereals under any programme/scheme duly approved by the Central Government or any State Government intended to distribute such goods at free of cost or at subsidized rate to the eligible beneficiaries like economically weaker sections of the society. This shall be subject to a certificate from designated authority for procurement and sale of such goods and no ITC shall be allowed on the same. (Concluded .) - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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