The Central Board of Indirect Taxes and Customs (CBIC) has recently issued pivotal clarifications on the applicability of Goods and Services Tax (GST) across various services, following the recommendations of the GST Council. These updates are significant for businesses and various stakeholders. Here are the key highlights:
- GST Exemption for Railways: Specific services provided by Indian Railways, such as the sale of platform tickets, retiring rooms, cloakroom services, and battery-operated car services, are exempt from GST. This exemption also applies to services exchanged between various zones/divisions within Indian Railways, effective from 15.07.2024 and retrospectively regularized from 20.10.2023 to 14.07.2024.
- GST Exemption on Transactions Between SPVs and Ministry of Railways: Services provided by SPVs to Indian Railways and maintenance services by Indian Railways to SPVs are now exempt from GST, effective from 15.07.2024 and retrospectively regularized from 01.07.2017 to 14.07.2024.
- GST on Statutory Collections by RERA: Statutory collections made by RERA as a governmental authority are exempt from GST under Entry No. 4 of Notification No. 12/2017-CT(R) dated 28.06.2017.
- GST on Incentives in the Digital Payment Ecosystem: Incentives paid by MeitY to acquiring banks for promoting RuPay Debit Cards and BHIM-UPI transactions are non-taxable. Further sharing of these incentives among stakeholders is also considered a subsidy and non-taxable.
- GST on Reinsurance of Specified General and Life Insurance Schemes: GST liability on reinsurance for certain exempt general insurance and life insurance schemes from 01.07.2017 to 24.01.2018 is regularized on an ‘as is where is’ basis.
- GST on Reinsurance of Government-Sponsored Insurance Schemes: Reinsurance of insurance schemes fully paid by the government is exempt from GST, with liability from 01.07.2017 to 26.07.2018 regularized on an ‘as is where is’ basis.
- GST on Retrocession Services: Retrocession services, a form of reinsurance transaction, are included under the term ‘reinsurance’ and are treated similarly for GST purposes as per Serial No. 36A of Notification No. 12/2017-CT(R).
- GST on Certain Accommodation Services: Accommodation services valued at or below ?20,000 per person per month for a continuous period of at least 90 days are exempt from GST, effective from 15.07.2024. Past transactions meeting these criteria from 01.07.2017 to 14.07.2024 are also regularized on an ‘as is where is’ basis.
These comprehensive clarifications are essential for businesses in real estate, railways, digital services, insurance, and hospitality sectors to ensure compliance and avoid potential legal complications. Staying updated with these developments is crucial for maintaining smooth operations and adhering to GST regulations.
In light of these updates, businesses must reassess their GST compliance processes. Expert guidance in navigating these changes and ensuring full compliance can be invaluable. Understanding and implementing these clarifications correctly can help avoid penalties and optimize your tax strategy.
Stay informed, stay compliant.
If you have any questions or need further clarification on how these updates might affect your business, feel free to reach out for expert advice and support.
