CBEC releases FAQs on GST on services

CBEC releases FAQs on GST on services

---

Q 1:Will GST be charged on actual tariff ordeclared tariff for accommodationservices Q 2: What will be GST rate if cost goes up(more than declared tariff) owing toadditional bed. Q 3 :Where will the declared tariff bepublished Q 4 : Same room may have different tariff atdifferent times depending on season orflow of tourists as per dynamic pricing.Which rate to be used then Q 5 :If tariff changes between booking andactual usage, which rate will be used Q 6 :GST at what rate would be levied if anupgrade is provided to the customer at alower rate A 1 : Declared or published tariff is relevant onlyfor determination of the tax rate slab. GSTwill be payable on the actual amount charged(transaction value). A 2 :GST rate would be determined according todeclared tariff for the room, and GST at therate so determined would be levied on theentire amount charged from the customer.For example, if the declared tariff is Rs. 7000per unit per day but the amount charged fromthe customer on account of extra bed is Rs.8000, GST shall be charged at 18% on Rs.8000. A 3 :Tariff declared anywhere, say on thewebsites through which business is beingprocured or printed on tariff card ordisplayed at the reception will be thedeclared tariff. In case different tariff isdeclared at different places, highest of suchdeclared tariffs shall be the declared tariff forthe purpose of levy of GST. A 4 :In case different tariff is declared fordifferent seasons or periods of the year, thetariff declared for the season in which theservice of accommodation is provided shallapply. A 5 :Declared tariff at the time of supply wouldapply. A 6 :If declared tariff of the accommodationprovided by way of upgrade is Rs 10000, butamount charged is Rs 7000, then GST wouldbe levied @ 28% on Rs 7000/-.

---

Q : Vide notification No. 11/2017-Central Tax(Rate) dated the 28th June 2017 entry 34,GST on the service of admission into casinounder Heading 9996 (Recreational, culturaland sporting services) has been levied @28%. Since the Value of supply rule has notspecified the method of determining taxableamount in casino, Casino Operators havebeen informed to collect 28% GST on grossamount collected as admission charge orentry fee. The method of levy adopted needsto be clarified. A :Relevant part of entry 34 of the said CGSTnotification reads as under: Heading 9996 (Recreational, cultural andsporting services) - (iii) Services by way of admission toentertainment events or access to amusementfacilities including exhibition of cinematographyfilms, theme parks, water parks, joy rides, merry gorounds, go-carting, casinos, race-course,ballet, any sporting event such as Indian PremierLeague and the like. - 14% (iv) (v) Gambling. - 14 % As is evident from the notification, entry tocasinos and gambling are two differentservices, and GST is leviable at 28% on boththese services (14% CGST and 14% SGST) onthe value determined as per section 15 of theCGST Act. Thus, GST @ 28% would apply onentry to casinos as well as on betting/ gamblingservices being provided by casinos on thetransaction value of betting, i.e. the total bet value, in addition to GST levy on any otherservices being provided by the casinos (such asservices by way of supply of food/ drinks etc. atthe casinos). Betting, in pre-GST regime, wassubjected to betting tax on full bet value.

---

Q : The provision in rate schedule notificationNo. 11/2017-Central Tax (Rate) dated the 28th June 2017 does not clearly state the taxbase to levy GST on horse racing. This may be clarified. A : GST would be leviable on the entire bet valuei.e. total of face value of any or all bets paid into the totalisator or placed with licensed bookmakers, as the case may be. Illustration: If entire bet value is Rs. 100, GSTleviable will be Rs. 28/-.

---

Q 1 : Whether for the purpose of entries at Sr. Nos. 34(ii) [admission to cinema] and7(ii)(vi)(viii) [Accommodation in hotels,inns, etc.], of notification 11/2017-CT(Rate) dated 28th June 2017, price/declared tariff includes the taxcomponent or not Q 2 :Whether rent on rooms provided to inpatientsis exempted If liable to tax,please mention the entry of CGSTNotification 11/2017-CT(Rate) Q 3 : What will be the rate of tax for bakeryitems supplied where eating place isattached manufacturer for the purposeof composition levy A 1 :Price/ declared tariff does not include taxes. A 2 : Room rent in hospitals is exempt. A 3 :Any service by way of serving of food ordrinks including by a bakery qualifies undersection 10 (1) (b) of CGST Act and henceGST rate of composition levy for the samewould be 5%.

---

Q : Whether home stays providingaccommodation through an ElectronicCommerce Operator, below threshold limitare exempt from taking registration A :Notification No. 17/2017-Central Tax (Rate),has been issued making ECOs liable forpayment of GST in case of accommodationservices provided in hotels, inns guest housesor other commercial places meant forresidential or lodging purposes provided by aperson having turnover below Rs. 20 lakhs (Rs. 10 lakhs in special category states) per annumand thus not required to take registration under section 22(1) of CGST Act. Such persons, eventhough they provide services through ECO, are not required to take registration in view ofsection 24(ix) of CGST Act, 2017.

---

  Q : To clarify whether supply in the situationslisted below shall be treated as a supply ofgoods or supply of service:- 1. The books are printed/ published/ soldon procuring copyright from the authoror his legal heir. [e.g. White TigerProcures copyright from Ruskin Bond] 2. The books are printed/ published/ soldagainst a specific brand name. [e.g.Manorama Year Book] 3. The books are printed/ published/ soldon paying copyright fees to a foreignpublisher for publishing Indian edition(same language) of foreign books. [e.g.Penguin (India) Ltd. pays fees toRoutledge London)] The books are printed/ published/ soldon paying copyright fees to a foreignpublisher for publishing Indianlanguage edition (translated). [e.g.Ananda Publishers Ltd. pays fees toPenguin (NY)] A :The supply of books shall be treated as supply ofgoods as long as the supplier owns the books and has the legal rights to sell those books on his ownaccount.

---

Q : Whether legal services other thanrepresentational services provided by anindividual advocate or a senior advocate to abusiness entity are liable for GST underreverse charge mechanism A :Yes. In case of legal services includingrepresentational services provided by anadvocate including a senior advocate to abusiness entity, GST is required to be paid by therecipient of the service under reverse chargemechanism, i.e. the business entity.

---