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TMI BlogLATEST CLARIFICATIONS ISSUED BY CBICX X X X Extracts X X X X X X X X Extracts X X X X ..... LATEST CLARIFICATIONS ISSUED BY CBIC - By: - Mr. M. GOVINDARAJAN - Goods and Services Tax - GST - Dated:- 21-10-2024 - The CBIC has issued three circulars recently giving clarifications in certain issues on the basis of the representations received from the stakeholders. These circulars are- Circular No. 234/28/2024-GST, dated 11.10.2024 - Clarification regarding the applicability of GST on certain services; Circular No. 235/28/2024-GST, dated 11.10.2024 Clarification regarding the applicability of GST on certain services; Circular No. 236/28/2024-GST, dated 11.10.2024 Clarification regarding the scope of as is or as is, where is basis . Circular No. 234/28/2024-GST The CBIC clarified the following issues in this circular- Service of affil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iation provided by universities to colleges; Service of affiliation provided by Central and State educational boards or councils or other similar bodies to schools; Applicability of GST on the flying training courses conducted by flying training organization; Regularizing payment of GST on transport of passengers by helicopter; Whether the treatment of ancillary services of GTA are to be treated as composite supply or independent supply? Regularizing GST on the import of services by foreign airlines, if made without consideration; GST on preferential location charges; GST on support services by an electricity transmission/electricity distribution company; GST on services of film distribution. Applicability of GST on the services provided by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... universities to colleges Usually, the Universities are granting affiliation to the colleges coming under their control. The purpose of giving affiliation is to monitor and ensure as to the fulfillment of the requirements of infrastructure in terms of space, technical prowess, financial liquidity, faculty strength etc. This service is not related to the admission of the students in the colleges or the conduct of the examination. The GST Council, in its 54 th Council meeting , recommended that the affiliation services provided by the Universities to the Colleges are not coming within the ambit of exemption provided to Educational Institutions in the exemption list. The CBIC clarified that GST @ 18% is applicable to the affiliation services p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided by the Universities to their colleges. Applicability of GST on the affiliation services provided by Governments to Schools The position of the schools is the same in the earlier period as mentioned in the first para-applicable to colleges. The GST Council recommended to tax the services of affiliation provided to schools by Central/State Governments or other bodies are taxable @ 18% and notified the same vide Circular No. 151/07/2021-GST, 17.06.2021 . However the GST Council that the said services provided to schools owned by the Central Government, State Government or Union territory are exempted. The same was notified in the Notification No. 08/2024-Central Tax (Rate), dated 08.10.2024 . This notification came into effect from 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.2024. The Council further clarified for the regularization of tax for the period from 01.07.2017 to 17.06.2021 is to be done as is where is. Applicability of GST on flying training course A flying training organization shall obtain the approval of DGCA before the students are enrolled to acquire flying experience. The flying experience required for the issue of private pilot and commercial pilot licenses shall be acquired at the Flying Training Organization approved/ recognized by the DGCA. The Civil Aviation Requirements issued also provide for a completion certificate to be issued by an approved FTO to each student who completes its approved course of training. It is clarified that the approved flying training courses conducted by FTOs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approved by DGCA, wherein the DGCA mandates the requirement of a completion certificate, are covered under Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and are hence, exempt. Regularization of GST on transport passengers by helicopters The GST Council recommended the following in respect of GST on transport of passengers by helicopters- The GST rate on transportation of passengers, with or without accompanied baggage, by air, in a helicopter on seat share basis is at 5% as notified in the Notification No.07/2014-Central Tax (Rates), dated 08.10.2024 which came into effect from 08.10.2024. The charter of helicopter would continue to attract GST at the rate of 18%. The transport of passengers by helicopter on ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her than seat share basis i.e., for charter operations will continue to attract GST at the rate of 18%. Regularization of GST on as is where is for the following- payment of GST on transportation of passengers, with or without accompanied baggage, by air, in a helicopter on seat share basis; payment of GST on transportation of passengers, with or without accompanied baggage, by air, in a helicopter on seat share basis. Treatment of ancillary services of GTA Representations have been received from stakeholdes to clarify whether incidental/ ancillary services such as loading/ unloading, packing, unpacking, transshipment, temporary warehousing etc., provided in relation to transportation of goods by road is to be treated as part of Goods Trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port Agency service, being composite supply, or these services are to be treated as separate independent supplies. On the basis of recommendations of GST Council, it is clarified that ancillary or incidental services provided by GTA in the course of transportation of goods by road, such as loading/unloading, packing/unpacking, transshipment, temporary warehousing etc., will be treated as composite supply of transport of goods. If such services are not provided in the course of transportation of goods and are invoiced separately, then these services will not be treated as composite supply of transport of goods and will be treated as independent supply. Import of services by foreign airlines without consideration The GST Council, in its 54 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Council meeting recommended to exempt the import of services by an establishment of a foreign airlines company from a related person or any of its establishment outside India, when made without consideration. The Department, in this regard, issued Notification No. 08/2024-Central Tax (Rate), dated 08.10.2024 which came into effect from 10.10.2024. The Council further recommended to regularize payment of GST on import of services by an establishment of a foreign airlines company from a related person or any of its establishment outside India, when made without consideration for the past period on as is where is basis for the period from 01.07.2017 to 09.10.2024. GST on Preferential Location Charges Based on the recommendations of the GST Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uncil, in its 54 th meeting , the Central Government clarified that location charges or Preferential Location Charges (PLC) paid along with the consideration for the construction services of residential /commercial/industrial complex forms part of composite supply where supply of construction services is the main service and PLC is naturally bundled with it and are eligible for same tax treatment as the main supply of construction service. GST on support services provided by the Electricity transmission or distribution utility On the basis of the recommendations of GST Council, in its 54 th meeting , the Central Government gave exemption to the supply of services by way of providing metering equipment on rent, testing for meters/ transforme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs/capacitors etc., releasing electricity connection, shifting of meters/service lines, issuing duplicate bills etc., which are incidental or ancillary to the supply of transmission and distribution of electricity provided by transmission and distribution utilities to their consumers. The payment of GST for supply of such services for the period i.e., from 01.07.2017 to 09.10.2024 is to be regularized on as is where is basis. GST on the services of film distribution Before 01.10.2021 the GST was levied @ 18% on Motion Picture, videotape and television programme distribution services under Heading 9996. But 12% rate of GST was leviable on temporary or permanent transfer or permitting the use or enjoyment of intellectual property right in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of goods other than IT technology software under Heading 9973. It was observed that both entries apparently covered services by way of licensing of rights to broadcast or show films. The GST Council, in its 47 th Council meeting recommended for a uniform rate of tax at 18% for the both with effect from 01.10.2021. The same was not given effect to. The GST Council in its 54th meeting held on 09.09.2024 has recommended to regularize the payment of GST on transaction between distributors and exhibitors wherein the distributors grant the theatrical rights to the exhibition centers on as is where is basis from 01.07.2017 to 30.09.2021. The Central Government implemented the same as recommended by the GST Council. Circular No. 235/28/2024-GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T This circular gives clarification on GST rate of the following- Extrude/Expanded Savory food products; Roof mounted package unit for AC machines for Railways; Car and Motor cycle seats This circular clarifies that extruded or expanded products, savoury or salted (other than un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion), falling under HS 1905 90 30 attract GST @ 12%. This rate would come into effect from 10.10.2024. Before that period the rate would be @ 18%. The GST rate of 5% continue on un-fried or un-cooked snack pellets, by whatever name called, manufactured through process of extrusion. A dispute has been arised as to whether Roof mounted air conditioners for Railways are to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be classified under HS 8415 @ 28% of GST or under HS 8607 @18% GST. This circular clarified that machines and apparatus of heading 8415 , which include Air conditioning machines, are excluded from the ambit of parts covered under heading 8607 as per Section note 2 of Section XVII of Customs Tariff Act, 1975. There is no ambiguity in the classification, to make it explicitly clear, it is clarified that the Roof Mounted Package Unit Air Conditioning Machines for Railways are classified under HS 8415 . For two wheelers the seats would be classifiable under HS 8714 attracting GST rate of 28%. Car seats are classifiable under 9401 attracting GST @ 18 %. In order to bring parity with seats of motorcycles (classified under HS 8714 ) which already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attract a GST rate of 28%, based on the recommendation of the Council, with effect from 10.10.2024, the car seats will be come under 28% GST. Circular No. 236/28/2024-GST This circular clarified the scope of as is where is basis mentioned in the GST circulars. In the recent circulars GST non-payment/ short-payments for past period have been regularized As is or As is, where is basis in certain cases for supply of goods or services or both. The phrase 'as is where is is generally used in the context of transfer of property and means that the property is being transferred in its current condition, whatever this condition happens to be and the transferee of property has accepted it with all its faults and defects, whether or not immediatel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y apparent. The payment made at lower rate or exemption claimed by the taxpayer shall be accepted and no refund shall be made if tax has been paid at the higher rate. The intention of the Council is to regularize payment at a lower rate including nil rate due to the tax position taken by taxable person, as full discharge of tax liability. Thus, in cases where the matters have been regularized on as is or as is, where is basis , in case of two competing rates and the GST is paid at lower of the two rates, or at nil rate where one of the competing rates was nil under notification entry, by some suppliers while other suppliers have paid at higher rate, payment at lower rate shall be treated as tax fully paid for the period that is regularized. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 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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