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CBIC Clarification : Applicability of GST on Few Service

GST bank account

Central Board Of Indirect Taxes & Customs issued Clarifications regarding applicability of GST on certain services

GST Dept issue circular provides clarifications on several GST-related issues, based on the GST Council’s recommendations during its 54th meeting on 9th September 2024.  CBIC Clarifications (CBIC  Circular No. 234/28/2024-GST  No. CBIC-190354/149/2024-TO(TRU-II)-CBEC)  on the following issues are being issued via Key points of Circular as under:

  • Affiliation Services by Universities and Educational Boards:

    • Universities to Colleges: Affiliation services are taxable at 18%, not covered under GST exemptions for educational institutions (Notification No. 12/2017).
    • Educational Boards to Schools: Affiliation services are taxable, with exemptions provided to government schools from 10th October 2024 (Notification No. 08/2024-Central Tax). GST for past periods (01.07.2017 to 17.06.2021) has been regularized.

  • Flying Training Courses by DGCA-approved Organizations:

GST exemption applies to DGCA-approved flying courses as they qualify as “educational services” under Notification No. 12/2017.

  • Passenger Transport via Helicopter:

GST on seat-sharing helicopter rides is set at 5% effective from 10th October 2024 (Notification No. 07/2024-Central Tax). Charter operations, however, remain taxable at 18%.

  • Goods Transport Agency (GTA) Services:

Incidental services (e.g., loading, warehousing) provided in course of transportation are treated as composite supply. Separately invoiced services outside transportation context are not part of GTA.

  • Import of Services by Foreign Airlines:

Exempted from GST if provided without consideration from foreign establishments related to the airlines. Past liabilities are regularized for 01.07.2017 to 09.10.2024.

  • Preferential Location Charges : 

PLC charges associated with property transactions are treated as part of construction services and attract the same GST rate before completion certification.

  • Support Services by Electricity Utilities:

Exempt from GST when incidental to electricity supply (e.g., meter testing, bill issuance) effective from 10th October 2024 (Notification No. 08/2024-Central Tax). Past liabilities regularized from 01.07.2017 to 09.10.2024. The GST Council’s recent recommendation provides clarity on the treatment of services related to electricity transmission and distribution utilities.

  • GST Exemption on Incidental Services:

In the 54th GST Council meeting on September 9, 2024, it was recommended that certain services provided by electricity transmission and distribution utilities should be exempt from GST. These services include:

      • Renting metering equipment
      • Testing meters, transformers, capacitors, etc.
      • Releasing electricity connections
      • Shifting meters or service lines
      • Issuing duplicate bills
    • These services, considered incidental or ancillary to the main supply of electricity transmission and distribution, will be exempt from GST, effective from October 10, 2024, as per Notification No. 08/2024-Central Tax (Rate) dated October 8, 2024.

  • Classification & Rates Prior to October 1, 2021:

    • Motion Picture Distribution Services (SAC 9996): Attracted an 18% GST rate.
    • Intellectual Property Rights (IPR) in Goods Other than IT Software (SAC 9973): Attracted a 12% GST rate.

    This dual classification created confusion over the applicable rate for licensing rights to broadcast or show films, as both classifications seemed relevant to the film industry.

  • Uniform Rate Implementation from October 1, 2021:

    • The GST Council, in its 45th meeting on September 17, 2021, resolved this by setting a uniform 18% GST rate for both types of services under SAC 9996.

  • Regularization of Past GST Payments:

    • In its 54th meeting on September 9, 2024, the GST Council recommended that the GST payments made by distributors and exhibitors on granting theatrical rights from July 1, 2017, to September 30, 2021, be regularized on an “as is where is” basis. This means that any payments made during this period are accepted as final, without additional adjustments, providing clarity and certainty for the involved parties.

Types of GST

Types of GST

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