CBEC Clarifies Levy of GST in respect of certain Services [Read Circular]

The Central Board of Excise and Customs (CBEC), today issued a clarification regarding the imposition of Goods and Services Tax ( GST ) in respect of certain services.

Hostel accommodation services do not fall within the ambit of charitable activities as defined in para 2(r) of notification No. 12/2017-CT(Rate). However, services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent is exempt. Thus, accommodation service in hostels including by Trusts having declared tariff below one thousand rupees per day is exempt.

With regard to the exemption for fees, while registering complaints to Consumer Disputes Redressal Commission office and its subordinate offices, it was clarified that fee paid by litigants in the Consumer Disputes Redressal Commissions are not leviable to GST. Any penalty imposed by or amount paid to these Commissions will also not attract GST.

It further said that leasing or rental services, with or without an operator, for any purpose are taxed at the same rate of GST as applicable on the supply of like goods involving the transfer of title in goods. Thus, the GST rate for the rental services in the given case shall be 28%, provided the said goods attract GST of 28%. IGST paid at the time of import of these goods would be available for discharging IGST on rental services. Thus, only the value added gets taxed.

Currently, health care services provided by a clinical establishment, an authorised medical practitioner or para-medics are exempted. With regard to this, it was clarified that 1) Services provided by senior doctors/ consultants/ technicians hired by the hospitals, whether employees or not, are healthcare services which are exempt. (2) Healthcare services have been defined to mean any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India[para 2(zg) of notification No. 12/2017- CT(Rate)]. Therefore, hospitals also provide healthcare services. The entire amount charged by them from the patients including the retention money and the fee/payments made to the doctors etc. is towards the healthcare services provided by the hospitals to the patients and is exempt. (3) Food supplied to the in-patients as advised by the doctor/nutritionists is a part of the composite supply of healthcare and not separately taxable. Other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable.