GST Clarifications on Various Services – Key Highlights from CBIC Circular No. 177/09/2022

02March

GST Clarifications on Various Services – Key Highlights from CBIC Circular No. 177/09/2022

The Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 177/09/2022-TRU to clarify applicable GST rates and exemptions on various services. The 47th GST Council Meeting examined multiple industry concerns, and this circular provides crucial clarifications.<h3>1. GST on Ice-Cream Parlors (2017-2021)</h3><ul><li>Earlier, ice-cream parlors were taxed at 5% GST without ITC.</li><li>The clarification confirms that ice-cream parlors must pay 18% GST with ITC from 6th October 2021 onwards.</li><li>However, past payments at 5% (without ITC) will not be refunded but will be treated as fully paid to avoid litigation.</li></ul><h3>2. GST on Educational Services</h3><ul><li>Application fees, migration certificates, and eligibility certificates issued by educational institutions are exempt from GST.</li><li>This exemption applies to both current and ex-students.</li></ul><h3>3. Warehousing of Cotton – GST Exemption Before 18th July 2022</h3><ul><li>Storage and warehousing of ginned or baled cotton was exempt under Notification No. 12/2017.</li><li>This exemption was withdrawn from 18th July 2022.</li></ul><h3>4. GST on Transit Cargo to Nepal and Bhutan</h3><ul><li>Services associated with transit cargo (both to and from Nepal/Bhutan) are exempt from GST.</li><li>This also includes empty container movement back to India.</li></ul><h3>5. GST on Sanitation & Conservancy Services to Government Departments</h3><ul><li>Sanitation services provided to municipalities and panchayats (under Articles 243W & 243G of the Constitution) are exempt.</li><li>However, if provided to Army or Government Ministries, they do not qualify for exemption.</li></ul><h3>6. GST on Advertisements in Souvenirs</h3><ul><li>Selling advertising space in souvenirs (published as books) by institutions is taxed at 5% GST.</li></ul><h3>7. GST on Transport of Minerals within a Mining Area</h3><ul><li>Renting of trucks, dumpers, loaders with a driver for mineral transport is not exempt under the transport category.</li><li>Instead, it is classified under rental services (Heading 9966) and taxed at 18%.</li><li>GST reduced to 12% from 18th July 2022 if fuel cost is included in rent.</li></ul><h3>8. GST on Preferential Location Charges (PLC) for Long-Term Lease</h3><ul><li>PLC charges (for choosing a location in a long-term lease) are part of the upfront amount and are exempt from GST.</li></ul><h3>9. GST on Honorarium Paid to Guest Anchors</h3><ul><li>Honorarium paid to TV guest anchors is taxable at 18% GST.</li><li>If the annual turnover of the guest anchor is below ₹20 lakhs (₹10 lakhs in special states), they do not need GST registration.</li></ul><h3>10. Additional Toll Charges for Vehicles Without FASTag</h3><ul><li>Additional toll charges for vehicles without FASTag are exempt from GST, as they are considered part of toll fees.</li></ul><h3>11. GST on Assisted Reproductive Technology (ART) / IVF</h3><ul><li>In-vitro fertilization (IVF) and other ART procedures are exempt from GST, as they qualify as healthcare services.</li></ul><h3>12. GST on Sale of Developed Land</h3><ul><li>Sale of land (even after levelling, drainage, etc.) is NOT taxable under GST.</li><li>However, development services (levelling, drainage, etc.) received by developers are taxable.</li></ul><h3>13. GST on Corporate Renting of Vehicles</h3><ul><li>If a company rents a vehicle for employees' transport (full-time with operational control), it is subject to Reverse Charge Mechanism (RCM).</li><li>If a company books transport for specific journeys, it is not liable under RCM.</li></ul><h3>14. GST on Hiring Non-AC Contract Carriages for Employees</h3><ul><li>If a firm hires non-AC buses for employee transport, it is exempt from GST only if the route and schedule are pre-determined.</li><li>If the firm has operational control over the vehicle, GST applies.</li></ul><h3>15. GST on Turnkey Dairy Plant Contracts</h3><ul><li>Construction, installation, and commissioning of dairy plants is classified as a Works Contract.</li><li>Before 18th July 2022: Taxed at 12%.</li><li>After 18th July 2022: Taxed at 18%.</li></ul><h3>16. GST on Private Ferries for Passenger Transport</h3><ul><li>Passenger transport via private ferries is exempt from GST, provided it is not used for tourism purposes.<a href="https://cms.plasament.com/storage/cir-177-08-2022-cgst.pdf">cir-177-08-2022-cgst</a> <a href="https://cms.plasament.com/storage/cir-177-08-2022-cgst.pdf">cir-177-08-2022-cgst</a>  </li></ul>

GST Clarifications on Various Services – Key Highlights from CBIC Circular No. 177/09/2022

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