The recently released GST Circular 164/19/2021 offers clarification regarding GST rates and classification of goods and services based on the recommendations of the 45th GST Council Meeting held on 17th September 2021. There were several issues that were examined in the council meeting and decisions were made for the same. The clarifications regarding these everyday goods and services will offer a lot of insights for the taxpayers, business owners and end consumers.
Read all the clarifications below:
1. Services by cloud kitchens/central kitchens:
Service provided by way of cooking and supply of food by cloud kitchens/central kitchens are covered under ‘restaurant service’, as defined in notification No. 11/2017- Central Tax (rate) and will attract 5% GST [without ITC].
2. Supply of ice cream by ice cream parlours:
Ice cream parlours sell already manufactured ice-creams i.e. they do not cook or prepare ice-creams for consumption like a restaurant. Thus, it is ‘supply of ice-cream as goods’ and not as a service, even if the supply has certain ingredients of service. Accordingly, it is clarified that ice cream sold by a parlour or any similar outlet would attract GST at the rate of 18%.
3. Coaching services supplied by coaching institutions and NGOs under the central sector scheme of ‘scholarships for students with Disabilities’:
In this case, the total expenditure is borne by the Government. It is covered under entry 72 of notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017 and hence it is exempt from GST.
4. Satellite launch services provided by M/s New Space India Limited (NSIL):
It has been clarified via GST circular no. 2/1/2017-IGST dated 27.09.2017 that Place of Supply (PoS) of satellite launch services supplied by ANTRIX Corporation Ltd. to customers located outside India is considered as export. It meets the requirements of section 2(6) of IGST Act and constitutes export of service and shall be considered as zero rated supply under GST. If the service recipient is located in India, the satellite launch services would be taxable.
As the satellite launch services supplied by NSIL are similar to those supplied by ANTRIX Corporation Ltd, the said circular No. 2/1/2017-IGST dated 27.09.2017, is applicable to them.
5. GST on overloading charges at toll plaza:
It has been clarified that overloading charges at toll plazas would get the same treatment as given to toll charges. Entry 23 of GST notification No. 12/2017-Central Tax (rate) dated 28th June, 2017, exempts Service by way of access to a road or a bridge on payment of toll charges.
6. Renting of vehicles to State Transport Undertakings and Local Authorities:
Services where the said vehicles are rented or given on hire to State Transport Undertakings or Local Authorities are eligible for the exemption. This exemption is irrespective of whether such vehicles are run on route timings as decided by the State Transport Undertakings or Local Authorities. It falls under effective control of State Transport Undertakings or Local Authorities which determines the rules of operation or plying of vehicles.
7. Services by way of grant of mineral exploration and mining rights:
The service by way of grant of mining rights during the period 1st July 2017 to 31st December 2018 was taxable at 18% in view of principle laid down in the 14th GST Council Meeting for residuary GST rate. Post, 1st January, 2019 no dispute remains as stated above.
8. Admission to indoor amusement parks having rides etc:
A total of 28% GST rate [entry 34 (iiia)] will be applicable for entry/ admission to a place having a casino or race club [even if it provides certain other activities] or admission to a sporting event like IPL.
On the other hand, Entry 34 (iii) states 18% GST and it covers all other cases of admission to amusement parks, or theme park etc or any place having joy rides, merry- go rounds, go-karting etc, whether indoor or outdoor as long as no access is provided to a casino or race club. This clarification will also apply to Entries 34(iii) and 34(iiia) as they existed prior to their amendment with effect from 1st October 2021.
9. Services supplied by contract manufacturers to brand owners for manufacturing alcoholic liquor for human consumption:
The expression “food and food products” excludes alcoholic beverages for human consumption. Alcoholic liquor is not considered as food in common context.
Accordingly, services by way of job work in relation to manufacturing alcoholic liquor for human consumption are not eligible for the GST rate of 5% prescribed under the said entry. Thus, the 45th GST Council meeting recommended that such job work would attract GST at the rate of 18%.
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