GST News and Updates – August 2022

 

GST Circulars

 

179/11/2022-GST – Clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 47th meeting held on 28th – 29th June, 2022 at Chandigarh

  • Classify electrically operated vehicles and charge 5% GST under HSN 8703 even if battery is not fitted to the vehicle upon sale.
  • HSN code 2515 – Caussine and other calcareous monumental or building stones; alabaster (except for marble and travertine), excluding ready-to-use, mirror-polished stone attracts a 5% concessional GST rate. It includes Napa stones that are brittle and hence, cannot rigorously be mirror polished, to be referred to as minor polished stones.
  • Fresh mangoes fall under HSN code 0804 and are exempt, whereas sliced and dried mangoes attract a 5% GST. Other forms of dried mango and mango pulp attract 12% GST.
  • Treated sewage water is not considered as purified. Entry HSN 2201 was recently amended and has exempted the treated sewage water.
  • Nicotine Polacrilex gum used orally and meant to discontinue the use of tobacco comes under tariff item 2404 91 00 with 18% GST.
  • The condition of 90% or more fly ash content applies to only fly ash aggregates and not to bricks and blocks. It has been removed from 18th July 2022.
  • GST rate was clarified on various by-products of pulses and dal such as chilka, khanda, and churi under HSN code 2302. Aquatic and poultry feed, including the husk, hay, wheat bran, and others excluding rice bran, are exempted. Whereas bran and residues from sifting or milling of cereals, including rice bran, attract 5% GST. The department may regularise any interpretation otherwise than this in the previous tax periods on a case-to-case basis. However, henceforth, cattle feed ingredient attracts 5% GST under HSN code 2302.

178/10/2022-GST – GST applicability on liquidated damages, compensation and penalty arising out of breach of contract or other provisions of law

There is a need for independent agreements between the parties with both obligation and consideration. It covers the following listed scenarios-

  • Payment of liquidated damages
  • Payment of bond or notice amount by employees
  • A fine collection for cheque dishonor
  • Penalty collection for law contravention
  • Compensation paid for canceling coal blocks
  • Late payment charges for delay in bill payment
  • Toll charges collection
  • Fixed and variable electricity charges collection by power generating companies from the State Electricity Board (SEB) or DISCOMS or, in turn, from the consumers.
  • Rail or airway ticket or hotel booking cancellation charges from the passenger or tourists.

177/09/2022-GST – Clarifications regarding applicable GST rates & exemptions on certain services

  • From 6th October 2021, the ice cream parlors must be paying GST on its sale at 18% with the provision of Input Tax Credit (ITC) claims. So, in the past, if ice cream parlors settled GST AT 5% without ITC, it would be considered legally valid to avoid any litigation.
  • The amount or fee charged from future students seeking entrance or admission or for eligibility or migration certificate to ex-students stands exempted.
  • No more exemption available for storing or warehousing ginned or baled cotton.
  • An exemption is given to transit services of cargo to and from Nepal and Bhutan, including any empty containers.
  • No exemption from GST for any sanitation and conservancy services to the Indian Army or other government departments or ministries if they do not adhere to general public functions listed in the 11th and 12th Schedule.
  • The sale of space in souvenir book for advertisement attract a 5% GST.
  • Any mineral transportation from a mining pit to railway siding or a beneficiation plant by vehicles with a driver’s help in a specific period falls under HSN code 9966 and attracts 12% GST (recently reduced if the fuel cost is included in consideration) or 18% GST (rest of the cases) without exemption.
  • An exemption is given to location charges or Preferential Location Charges (PLC) received over and above the lease premium for long-term lease of land. It forms part of the upfront amount charged for a long-term lease of land.
  • Services by the guest anchors attract 18% GST if they are subject to GST registration upon turnover exceeding the threshold limit.
  • Additional toll fee from vehicles not having Fastags is toll payment for giving access to bridges or roads and hence, exempted from GST.
  • Health care services include Assisted Reproductive Technology (ART)/In vitro fertilisation (IVF) do not attract GST.
  • Service supplied for land development, such as leveling or laying drainage lines, attract GST.
  • If companies hire any passenger vehicle for a fixed duration at their disposal, it falls under the HSN code 9966 and pay GST on a reverse charge basis. But if the companies use the passenger transport service for particular journeys or voyages but do not rent the vehicle for a fixed duration, it would fall under HSN code 9964 not attracting GST under the reverse charge mechanism. The same treatment applies to transporting employees to and from work in non-AC vehicles.
  • Contract for construction, installation, and commissioning of a dairy plant is the sale of works contract and attract 18% GST from 18th July 2022.
  • No GST on tickets purchased for public transportation from one place to another whether or not the ferry is publicly or privately owned or operated, excluding cases where it promotes tourism.

Single Click Nil Filing of GSTR-1

Single click Nil filing of GSTR-1 has been introduced on the GSTN portal to improve the user experience and performance of GSTR-1/IFF filing. Taxpayers can now file NIL GSTR-1 return by simply ticking the checkbox File NIL GSTR-1 available at GSTR-1 dashboard.