Key Highlights of Circular No. 164/20/2021-GST

02March

Key Highlights of Circular No. 164/20/2021-GST

<h2>1. GST on Cloud Kitchens & Central Kitchens</h2>? Cloud kitchens & central kitchens qualify as "restaurant services" under GST. ? Applicable GST rate: 5% (without ITC). ? Reason: They provide cooked food, even if it’s only for takeaway or delivery.<hr><h2>2. GST on Ice Cream Sold by Ice Cream Parlors</h2>? Ice cream parlors sell pre-manufactured ice cream, and do not prepare/cook it. ? GST Treatment: Considered supply of goods, not restaurant service. ? Applicable GST rate: 18% GST.<hr><h2>3. GST Exemption for Coaching Services Under Disability Scholarship Scheme</h2>? Coaching services for students with disabilities (funded by the government) are exempt from GST. ? Reason: Exempt under Entry 72 of Notification No. 12/2017-CT (Rate) as government-funded training.<hr><h2>4. GST on Satellite Launch Services by NSIL (New Space India Ltd.)</h2>? Satellite launch services provided by NSIL to international customers qualify as "export of services" and are zero-rated. ? Domestic satellite launch services are taxable under GST. ? Reason: Same treatment as given to ANTRIX Corporation Ltd. in Circular No. 2/1/2017-IGST.<hr><h2>5. GST on Overloading Charges at Toll Plazas</h2>? Toll charges are exempt from GST under Entry 23 of Notification No. 12/2017-CT (Rate). ? Overloading charges are considered part of toll fees and are also exempt from GST.<hr><h2>6. GST on Renting of Vehicles to State Transport Undertakings & Local Authorities</h2>? GST Exemption Applies to renting/hiring of vehicles to:<ul><li>State Transport Undertakings (STUs) – For 12+ passenger vehicles.</li><li>Local Authorities – For electric vehicles with 12+ passengers. ? Clarification: The term "giving on hire" includes renting, so renting of vehicles also qualifies for exemption.</li></ul><hr><h2>7. GST on Grant of Mineral Exploration & Mining Rights (Before 01.01.2019)</h2>? Before 01.01.2019: Mining rights were taxed at 18% GST, not 5%. ? After 01.01.2019: Mining rights explicitly taxed at 18% GST. ? Reason:<ul><li>Mining leases are not goods and do not qualify for the 5% rate linked to minerals.</li><li>Standard GST rate of 18% applies to services unless specified otherwise.</li></ul><hr><h2>8. GST on Admission to Amusement Parks & Entertainment Facilities</h2>? Before 01.10.2021:<ul><li>18% GST → Amusement parks, theme parks, joy rides, go-karting, etc.</li><li>28% GST → Casinos, race clubs, sporting events (e.g., IPL). ? Clarification:</li><li>28% GST only applies to places with casinos or race clubs.</li><li>Indoor amusement parks & family entertainment centers (FECs) = 18% GST.</li></ul><hr><h2>9. GST on Contract Manufacturing of Alcoholic Liquor for Human Consumption</h2>? Alcoholic liquor is NOT considered "food" for GST purposes. ? Contract manufacturing services (job work) for alcohol attract 18% GST (not 5%). ? Reason: Job work rate of 5% applies only to food & food products under Chapters 1-22, excluding alcohol.<hr><h2>10. Trade Notices & Implementation</h2>? CBIC directs tax authorities to issue trade notices ensuring businesses understand these clarifications. ? Any challenges in implementation should be reported to CBIC.<a href="https://cms.plasament.com/storage/shubham-pathak/circular-no-164-2021-gst.pdf">Circular-No-164-2021-GST</a>

Key Highlights of Circular No. 164/20/2021-GST

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