23 October 2019 Abhishek Kumar

Statutory Amendments to give effect to recommendations made during 37th Meeting of GST Council

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Change in GST rates on services

Notification No. 20/2019- Central Tax (Rate) and Notification No. 19/2019- IGST (Rate) both dt 30 September, 2019

(effective from 1 October, 2019)

 

S. No.

Type of Service

New GST Rate

 

1

Hotel accommodation service having value of supply of a unit of accommodation -

  >INR 1,000 upto INR 7,500

12%

  >INR 7,500

18%

2

Supply of “restaurant service” other than at specified premises*

5% without ITC

3

Outdoor catering services, other than at specified premises*, provided by any person other than-

  1. suppliers providing hotel accommodation at specified premises*,
  2. suppliers located in specified premises*

5% without ITC

4

Composite supply of outdoor catering together with renting of premises at premises other than specified premises*, provided by any person other than-

  1. suppliers providing hotel accommodation at specified premises*, or
  2. suppliers located in specified premises*.

5% without ITC

  5

Accommodation, food and beverage services including restaurant services other than covered 1 to 4 above

18%

 6

Job work services in relation to diamonds

1.5%

7

Job work services in relation to bus body building

18%

8

Other professional, technical and business services relating to exploration, mining or drilling of petroleum crude or natural gas or both

12%

 

* “Specified premises” means premises providing hotel accommodation services having declared tariff of any unit of accommodation above INR 7,500 per unit per day or equivalent.

Here, “Declared tariff” means charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit.

 

 

 

Exemption on Services

Notification No. 21/ 2019 – Central Tax (Rate) and Notification No. 20/ 2019 – IGST (Rate) both dt 30 September, 2019

(effective from 1 October, 2019)

The above-mentioned notification has been issued to notify exemption under GST on the following services:

  • Exemption on Services i.r.o. FIFA U-17 Women's World Cup 2020 to be hosted in India:
  • Services provided by and to FIFA and its subsidiaries which are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020 to be hosted in India wherein director (Sports), Ministry of Youth Affairs and Sports has to issue prescribed certifications.
  • Services by way of right to admission to the events organized under FIFA U-17 Women's World Cup 2020.
  • Services i.r.o. export freight by air or sea (services by way of transportation of goods by an aircraft/ vessel from a customs station of clearance in India to a place outside India):

Exemption of GST on the above-mentioned services has been extended for a further period of 1 year i.e. till 30 September, 2020.

  • Services by way of storage or warehousing of notified products:

Services by way of storage or warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, coffee and tea.

  • Services of life insurance:

Services of life insurance provided or agreed to be provided by the Central Armed Police Forces (under Ministry of Home Affairs) Group Insurance Funds to their members under the Group Insurance Schemes of the concerned Central Armed Police Force

  • Services of General Insurance:

Services of general insurance business provided under Bangla Shasya Bima scheme.

 

Exemption on Goods Supplied for Specified Projects under Food and Agricultural Organisation of the United Nations (FAO)

Notification No.19/2019-Central Tax (Rate) and Notification No.18/2019-IGST (Rate) both dt 30 September, 2019

(effective from 1 October, 2019)

The above-mentioned notifications have been issued to exempt levy of GST on goods supplied to FAO for execution of the following projects:

  • Strengthening Capacities for Nutrition-sensitive Agriculture and Food systems,
  • Green Ag: Transforming Indian Agriculture for Global Environment benefits and the conservation of Critical Biodiversity and Forest landscape.

The exemption is subject to the condition that an officer not below the rank of Deputy Secretary to the Government of India in the Ministry of Agriculture and Farmers Welfare certifies:

  • The quantity and description of the goods; and
  • That the said goods are intended for the purpose of use in execution of said projects.

 

 

 

W.r.t. Applicability of Reverse Charge Mechanism (RCM) on Certain Services

Notification No. 22, 24/2019- Central Tax (Rate) and Notification No.21, 23/2019-IGST (Rate) both dt 30 September, 2019

(effective from 1 October, 2019)

  • Services provided by way of renting of a motor vehicle provided to a body corporate located in taxable territory is notified under RCM where supplier is a person other than a body corporate, paying tax at 5% on renting of motor vehicles with input tax credit only of input service in the same line of business.
  • Tax on transfer of copyright by an author to a publisher relating to original literary works is payable by a publisher under reverse charge. Now, an option has been given to authors in such case to pay GST under forward charge by furnishing a declaration
    • on or before 31.10.2019 for the option to be effective from 1.11.2019 or
    • before the commencement of any Financial Year for the option to be effective from the commencement of that Financial Year.

The option, once exercised, shall not be allowed to be changed within a period of 1 year from the date of exercising the option and shall be valid, at least, till the end of Financial Year following the year in which it is made.

  • Earlier, a promoter of specified construction projects was liable to pay tax under RCM for procurement of cement from unregistered supplier which constituted shortfall from the minimum value of supplies required to be purchased by the promoter. Now it has been provided that such promoter has to pay tax under RCM for all the procurement of cement (HSN 2523) from unregistered supplier without any condition.

 

Changes in GST rates for Goods

Notification No. 14 & 16/ 2019 - Central Tax (Rate), Notification No. 13/ 2019 – IGST (Rate) and Notification No. 2/2019-Compensation Cess (Rate) all dt 30 September, 2019

(effective from 1 October, 2019)

Key highlights of change in GST rates for goods have been captured below:

 

Commodity

Old Rate

New Rate

Marine Oil 0.5% (FO)

18%

5%

 

Caffeinated Beverages

18%

28% + 12% Compensation Cess

Specified Goods for Petroleum operations or coal bed methane operations undertaken under specified contracts under the Hydrocarbon Exploration Licensing Policy (HELP) or Open Acreage Licensing Policy (OALP)

Applicable Rate of Goods

5%

           

 

 

Changes in Rate of Compensation Cess on Goods

Notification No. 2/2019-Compensation Cess (Rate) dt 30 September, 2019

(effective from 1 October, 2019)

Commodity

Old Rate

New Rate

Passenger vehicles having length not exceeding 4000 mm, designed for carrying more than 10 persons but upto 13 persons with engine capacity

  • 1500 cc in case of diesel
  • 1200 cc in case of petrol/CNG/LPG

15%

  • 3%
  • 1%

 

Place of supply of R&D services in pharmaceutical sector

Notification No. 04/2019- IGST (Rate) dt 30 September, 2019

(effective from 1 October, 2019)

It has been notified that in case of supply of specified research and development services related to pharmaceutical sector by a person located in taxable territory to a person located in the non-taxable territory, place of supply shall be location of recipient of service. For this, following conditions need to be satisfied:

  • Supply of services from the taxable territory are provided as per a contract between the service provider located in taxable territory and service recipient located in non-taxable territory.
  • Such supply of services fulfills all other conditions in the definition of export of services, except the condition that place of supply must be outside India.

 

Other Amendments

Notification 18, 23 & 25/2019-Central Tax (Rate) and Notification No. 22 & 24/2019-IGST (Rate) all dt 30 September, 2019)

(effective from 1 October, 2019)

  • Composition scheme shall not be applicable for supply of aerated water (HSN 2202 10 10).
  • Service by way of grant of alcoholic liquor licence, against consideration in the form of licence fee or application fee by the State Governments shall be treated neither as a supply of goods nor a supply of service.
  • Earlier it had been notified vide Notification No.4/2018-Central Tax (Rate), Dated 25-1-2018 that in case of transfer of development rights, liability to pay tax shall arise at the time of transfer of possession or right in the constructed building to the person supplying the development rights. Now it has been notified that said specific treatment shall not be applicable for development rights supplied on or after 1 April, 2019.