Clarifications on GST Applicability and ITC Availability
<p><span>The Government of India has provided clarifications on the applicability of GST and the availability of Input Tax Credit (ITC) in specific scenarios. The key highlights from the circular issued by the Ministry of Finance, Department of Revenue, Tax Research Unit, are as follows:</span></p><ol start="1"><li><span><strong>Agricultural Produce and GST Exemption</strong>:</span><ul><li><span>Warehousing of processed agricultural products like tea, coffee, pulses, jaggery, and spices does not qualify for GST exemption. Only unprocessed agricultural products such as green tea leaves, whole pulse grains, and other products that retain their essential characteristics after processing qualify for exemption.</span></li></ul></li><li><span><strong>Inter-State Transfer of Aircraft Parts</strong>:</span><ul><li><span>Inter-state transfer of aircraft engines, parts, and accessories between distinct persons attracts GST. However, credit of GST paid on these items can be used to discharge GST on the inter-state supply, despite the input tax credit not being allowed for the service of transporting passengers by air in economy class.</span></li></ul></li><li><span><strong>General Insurance Policies Provided by State Government</strong>:</span><ul><li><span>Services provided by the State Government under any insurance scheme for which the premium is paid by the government are exempt from GST. Additionally, services by State Governments for general insurance to state employees, police personnel, electricity department employees, or students are also exempt.</span> <a href="https://cms.plasament.com/storage/circular-16.pdf">circular 16</a><br> </li></ul></li></ol>