CBIC Clarifies GST Exemption for Pure Services and Composite Supplies in CPWD Horticulture, up to 25% Total Value of Supply [Read Circular]
The Central Board of Indirect Taxes and Customs (CBIC), through Circular No. 206/18/2023-GST issued on October 31, 2023, has provided clarification that the exemption from Goods and Services Tax (GST) applies to pure services and composite supplies within Central Public Works Department (CPWD) horticulture, as long as they constitute up to 25% of the total value of the supply. Issue...
The Central Board of Indirect Taxes and Customs (CBIC), through Circular No. 206/18/2023-GST issued on October 31, 2023, has provided clarification that the exemption from Goods and Services Tax (GST) applies to pure services and composite supplies within Central Public Works Department (CPWD) horticulture, as long as they constitute up to 25% of the total value of the supply.
Issue before the CBIC
Whether 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 under Sr. No. 3 and 3A of Notification no 12/2017-CTR dated 28.06.2017.
Clarification
The CWPD is responsible for the development and maintenance of public parks in government residential colonies, government offices, and other public areas.
The functions related to the maintenance of community assets, urban forestry, environmental protection, and the promotion of ecological aspects are entrusted to Panchayats and Municipalities under Article 243G and 243W, in conjunction with Schedule 11 and Schedule 12 of the Constitution.
Notification No. 12/2017-CTR, under Sr. No. 3 and 3A, grants an exemption from GST for pure services and composite supplies of goods and services, where the value of goods does not exceed 25%. These services are provided to the Central Government, State Government, Union Territory, or local authority, as part of activities related to functions entrusted to Panchayats under Article 243G or to Municipalities under Article 243W of the Constitution.
To clarify, the supply of pure services and composite supplies, such as horticulture or horticulture works (provided that the value of goods does not exceed 25% of the total supply value), made to the CPWD, qualifies for exemption from GST under Sr. No. 3 and 3A of Notification No. 12/2017-CTR, dated June 28, 2017.
To Read the full text of the Circular CLICK HERE
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