Decisions relating to Services in 23rd GST Council meeting

Decisions relating to Services in 23rd GST Council meeting In the 23rd meeting of GST Council held at Guwahati, Assam on 10.11.2017, the fol

Ankita Khetan

Nov 11, 2017

Last update on Nov 11, 2017

Decisions relating to Services in 23rd GST Council meeting

In the 23rd meeting of GST Council held at Guwahati, Assam on 10.11.2017, the followingdecisions relating to exemptions/changes in GST rates/ITC eligibility criteria, rationalization ofrates/exemptions and clarification on levy of GST on services were taken. The information isbeing uploaded immediately after the GST Councils decision and it will be subject tofurther vetting during which the list may undergo some changes. The decisions of the GSTCouncil are being communicated for general information and will be given effect to throughGazette notifications/circulars which shall have force of law.

EXEMPTIONS/CHANGES IN GST RATES/ITC ELIGIBILITY CRITERIA

All stand-alone restaurants irrespective of air conditioned or otherwise, will attract 5%GST without ITC. Food parcels (or takeaways) will also attract 5% GST without ITC.
Restaurants in hotel premises having room tariff of less than Rs 7500 per unit per day will attract GST of 5% without ITC.
Restaurants in hotel premises having room tariff of Rs 7500 and above per unit per day(even for a single room) will attract GST of 18% with full ITC.
Outdoor catering will continue to be at 18% with full ITC.
GST on Services by way of admission to "protected monuments" will be exempted.
The rate of GST on job work services in relation to manufacture of those handicraft goodsin respect of which the casual taxable person has been exempted from obtainingregistration, shall be reduced to 5% with full ITC.
RATIONALIZATION OF EXEMPTION ENTRIES
The existing exemption entries with respect to services provided by Fair Price Shops toCentral Government, State Governments or Union territories by way of sale of food grains,kerosene, sugar, edible oil, etc. under Public Distribution System (PDS) againstconsideration in the form of commission or margin, is being rationalized so as to removeambiguity regarding list of items and the category of recipients to whom the exemption isavailable.
In order to maintain consistency, entry at item (vi) of Sr. No.3 of notification No. 11/2017-CT(R) will be aligned with the entries at items (ii), (iii), (iv) and (v) of SI.No.3. [The wordservices in entry (vi) will be replaced with "Composite supply of Works contract asdefined in clause 119 of Section 2 of CGST Act, 2017"].
In order to obviate disputes and litigation, it is proposed to place- (i) permanent transfer of Intellectual Property other than Information Technologysoftware in the goods rate of 12%; and (ii) permanent transfer of Intellectual Property in respect of InformationTechnology software in the goods rate list of 18%.
CLARIFICATIONS
It is proposed to clarify that credit of GST paid on aircraft engines, parts & accessorieswill be available for discharging GST on interState supply of such aircraft engines, parts& accessories by way of inter-state stock transfers between distinct persons as specifiedin section 25 of the CGST Act, notwithstanding that credit of input tax charged onconsumption of such goods is not allowed for supply of service of transport of passengersby air in economy class at GST rate of 5%. >>>>CBEC's Circular clarifies interstate movement of rigs, tools, spares and all goods on wheels
A suitable clarification will be issued by way of a Circular that processed products suchas tea (i.e. black tea, white tea etc.), processed coffee beans or powder, pulses (de-huskedor split), jaggery, processed spices, processed dry fruits, processed cashew nuts etc. falloutside the definition of agricultural produce given in notification No. 11/2017-CT(R) and12/2017-CT(R) and therefore the exemption from GST is not available to their loading,packing, warehousing etc.
A suitable clarification is being issued that (i) services provided to the CentralGovernment, State Government, Union territory under any insurance scheme for whichtotal premium is paid by the Central Government, State Government, Union territory areexempt from GST under SI. No. 40 of notification No. 12/2017-Central Tax (Rate); (ii)services provided by State Government by way of general insurance (managed bygovernment) to employees of the State government/ Police personnel, employees ofElectricity Department or students are exempt vide entry 6 of notification No. 12/2017-CT(R) which exempts Services by Central Government, State Government, Union territory or local authority to individuals.