50th GST Council: Reduced, Increased and Exempted Servies under GST

The Union Finance Minister Nirmala Sitharaman presided over the 50^th meeting of the GST Council on 11^th July 2023 at Vigyan Bhawan in New Delhi including Revenue Secretary, CBIC chairman.

Read more: 50th GST Council Meeting: Key Highlights

As a significant move to support the space industry and streamline service taxation, the Goods and Services Tax (GST) Council has announced a series of amendments to GST rates on services.

The reforms include extending GST exemptions for satellite launch services to private sector organizations, easing compliance requirements for Goods Transport Agencies (GTAs), clarifying the taxability of services provided by directors and refining the taxation of food and beverages in cinema halls.

To foster innovation and encourage start-ups in the space sector, the GST Council has decided to extend the GST exemption on satellite launch services to private sector organizations.

Previously, this exemption was limited to the Indian Space Research Organisation (ISRO), Antrix Corporation Limited, and New Space India Limited (NSIL). This move aims to stimulate private sector participation in the space industry and drive technological advancements.

In order to simplify compliance for Goods Transporting Agencies (GTAs), the council has introduced a trade-friendly measure. GTAs will no longer be required to file declarations annually for paying GST under the forward charge mechanism. Once they exercise this option for a specific financial year, it will be deemed to apply for subsequent years unless a declaration is submitted to revert to the reverse charge mechanism (RCM).

Additionally, the deadline for exercising this option has been extended to March 31^st of the preceding financial year, with January 1^st being the start date for exercising the choice.

Another clarification pertains to services provided by directors of companies in their private capacity.

It has been emphasized that services such as renting immovable property to the company or body corporate will not be taxable under the RCM. Only services rendered by directors in their capacity as directors will be subject to RCM.

Moreover, the GST Council has addressed the taxability of food and beverages supplied in cinema halls.

It has been stated that if such services are provided as part of a separate service and independently from the cinema exhibition service, they will be taxable as restaurant services.

However, if the sale of cinema tickets and the supply of food and beverages are combined as a bundled supply that qualifies as a composite supply, the entire supply will attract GST at the rate applicable to the principal supply, which is the exhibition of cinema. These revisions to GST rates and regulations aim at enhancing private sector participation in satellite launch services, reducing compliance burdens for GTAs, clarifying the tax treatment of director services and ensuring clear taxation guidelines for food and beverage supplies in cinema halls thus contributing to economic growth, innovation, and ease of doing business in India's evolving business landscape

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