Clarifications Regarding Applicability Of Gst On Certain Services

Clarification on same line of business:

• Services of transport of passengers by any motor vehicle (SAC 9964) and renting of motor vehicle designed to carry passengers with operator (SAC 9966), 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. It is hereby clarified that input services in the same line of business not include leasing of motor vehicles without operator (SAC 9973) which attracts GST and/or compensation cess at the same rate as supply of motor vehicles by way of sale.

Clarification on electricity charges:

• It is clarified that whenever electricity is being supplied bundled with renting of immovable property and/or maintenance of premises, as the case may be, it forms a part of composite supply and shall be taxed accordingly. The principal supply is renting of immovable property and/or maintenance of premise, as the case may be, and the supply of electricity is an ancillary supply as the case may be. Even if electricity is billed separately, the supplies will constitute a composite supply and therefore, the rate of the principal supply i.e., GST rate on renting of immovable property and/or maintenance of premise, as the case may be, would be applicable.

• However, where the electricity is supplied by the Real Estate Owners, Resident Welfare Associations (RWAs), Real Estate Developers etc., as a pure agent, it will not form part of value of their supply. Further, where they charge for electricity on actual basis that is, they charge the same amount for electricity from their lessees or occupants as charged by the State Electricity Boards or DISCOMs from them, they will be deemed to be acting as pure agent for this supply

Clarification on gst on job work for processing of “barely” in to “malted barley” :

• Job work for processing of “Barley” into “Malted Barley” attracts GST @ 5% as applicable to "job work in relation to food and food products” and not 18% as applicable on “job work in relation to manufacture of alcoholic liquor for human consumption”.

Clarification Related Government Authorities And Pure Services : 

• DMFT set up by the State Governments are Governmental Authorities and thus eligible for the same exemptions from GST as available to any other Governmental Authority.

• It is clarified that supply of pure services and composite supplies by way of horticulture/horticulture works (where the value of goods constitutes not more than 25 per cent of the total value of supply) made to CPWD are eligible for exemption from GST.

Access circular from below link:

https://taxinformation.cbic.gov.in/view-pdf/1003189/ENG/Circulars

Disclaimer: The news articles and knowledge updates related to law, business, and finance published by us are intended to provide general information and basic understanding only and are not substitute for any professional or legal advice. By accessing and using the news articles and knowledge updates on our website, you acknowledge and agree to the terms of this disclaimer. We reserve the right to modify or update this disclaimer at any time without prior notice.