CBIC issues Clarifications on GST Applicability on Certain Services as per Council Recommendations [Read Circular]

The Central Board of Indirect Taxes and Customs (CBIC) has issued clarifications regarding the applicability of Goods and Services Tax (GST) on certain services, as per the recommendations made during the 53rd GST Council meeting held on June 22, 2024. These clarifications address a range of issues, aiming to resolve uncertainties and streamline GST application in various sectors.

Key Clarifications Issued:

1. GST Exemption for Ministry of Railways Services:

   - The CBIC has exempted services provided by the Ministry of Railways, including the sale of platform tickets, retiring room facilities, cloakroom services, and battery-operated car services, from GST. This exemption is effective from July 15, 2024, and regularises GST liability for the period from October 20, 2023, to July 14, 2024, on an 'as is where is' basis.

2. Transactions Between SPVs and Ministry of Railways:

   - Services provided by Special Purpose Vehicles (SPVs) to the Ministry of Railways, allowing the use of infrastructure built and owned by SPVs during the concession period, are now exempt from GST. This exemption also applies retroactively from July 1, 2017, to July 14, 2024, regularising past transactions on an 'as is where is' basis.

3. Statutory Collections by RERA:

   - The CBIC clarified that statutory collections made by the Real Estate Regulatory Authority (RERA) under the Real Estate (Regulation and Development) Act, 2016, are exempt from GST as per the existing notification No. 12/2017-CT(R) dated June 28, 2017.

4. Incentives in Digital Payment Ecosystem:

   - Incentives shared by acquiring banks with other stakeholders in the digital payment ecosystem under the Incentive Scheme for promoting RuPay Debit Cards and low-value BHIM-UPI transactions are considered subsidies and are not taxable.

5. Reinsurance of Specified General and Life Insurance Schemes:

   - The CBIC has regularised the GST liability on the reinsurance of exempted general and life insurance schemes for the period from July 1, 2017, to January 24, 2018, on an 'as is where is' basis.

6. Reinsurance of Government-Sponsored Insurance Schemes:

   - GST liability on the reinsurance of government-sponsored insurance schemes, where the total premium is paid by the government, has been regularised for the period from July 1, 2017, to July 26, 2018, on an 'as is where is' basis.

7. Retrocession Services:

   - It has been clarified that 'retrocession' services fall under the definition of 'reinsurance' as mentioned in notification No. 12/2017-CT(R) dated June 28, 2017, and are thus exempt from GST.

8. Certain Accommodation Services:

   - Accommodation services with a value of supply less than or equal to INR 20,000 per person per month, provided for a minimum continuous period of 90 days, are exempt from GST. This exemption applies retrospectively from July 1, 2017, to July 14, 2024, on an 'as is where is' basis.

These clarifications aim to resolve ambiguities and provide a clear framework for the application of GST in various sectors, ensuring compliance and easing the tax burden on affected entities.

Read More: CBIC notifies GST Rate Changes as per Council Recommendations

The notifications related to these exemptions and clarifications have been issued and are effective as of July 15, 2024.

To Read the full text of the Order CLICK HERE

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