Panaji, 30th November, 2021 (Agrahayana 9, 1943)
SERIES II No. 35
PUBLISHED BY AUTHORITY
EXTRAORDINARY
No. 2
GOVERNMENT OF GOA
Department of Finance
Office of the Commissioner of Commercial Taxes
---
CCT/26-4/2017-18/E/2183
Circular
(No. 16/2021-22-GST)
Subject: Clarification regarding GST rates &
classification
(goods)
based
on
the
recommendations of the GST Council in its 45th
meeting held on 17th September, 2021 at
Lucknow–reg.
Based on the recommendations of the GST Council
in its 45th meeting held on 17th September, 2021 at
Lucknow, clarification, with reference to GST levy,
related to the following are being issued through this
circular:
i. Fresh vs dried fruits and nuts;
ii. Classification and applicable GST rates on
Tamarind seeds;
iii. Coconut vs Copra;
iv. Classification and applicable GST rate on Pure
henna powder and leaves, having no additives;
v. Scented sweet supari and flavoured and coated
illaichi;
vi. Classification of Brewers’ Spent Grain (BSG),
Dried Distillers’ Grains with Soluble [DDGS]
and other such residues and applicable GST
rate;
745
Suggestions are welcomed on e-mail: dir–[email protected]
RNI No. GOAENG/2002/6410
Reg. No. RNP/GOA/32/2021-23
vii. GST rates on goods [miscellaneous
pharmaceutical products] falling under
heading 3006;
viii. Applicability of GST rate of 12% on all
laboratory reagents and other goods falling
under heading 3822;
ix. Requirement of Original/import Essentiality
certificate, issued by the Directorate General
of Hydrocarbons (DGH) on each inter-State
stock transfer of goods imported at
concessional GST rate for petroleum
operations;
x. External batteries sold along with UPS
Systems/Inverter;
xi. Specified Renewable Energy Projects;
xii. Fiber Drums, whether corrugated or non-
corrugated.
2. The issue-wise clarifications are discussed in
detail below.
3. Applicability of GST on fresh and dried fruits
and nuts:
3.1 Representations have been received seeking
clarification regarding the distinction between fresh
and dried fruits and nuts and applicable GST rates.
3.2 At present, fresh nuts (almond, walnut,
hazelnut, pistachio etc.) falling under heading 0801
and 0802 are exempt from GST, while dried nuts
under these headings attract GST at the rate of 5%/
/12%. The general Explanatory Notes to Chapter 08
mentions that this chapter covers fruit, nuts
intended for human consumption. They may be fresh
(including chilled), frozen (whether or not
previously cooked by steaming or boiling in water
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or containing added sweetening matter) or dried
(including dehydrated, evaporated or freeze-
dried). Thus, HS chapter differentiates between
fresh, frozen and dried fruits and nuts. Fresh fruit
and nuts would thus cover fruit and nuts which are
meant to be supplied in the state as plucked. They
continue to be fresh even if chilled. However, fruit
and nuts do not qualify as fresh, once frozen (cooked
or otherwise), or intentionally dried to dehydrate
including through sun drying, evaporation or
freezing, for supply as dried fruits or nuts. It may be
noted that in terms of note 3 to Chapter 8, dried fruits,
even if partially re-hydrated, or subject to
preservation say by moderate heat treatment, retain
the character of dried fruits or dried nuts.
3.3. Therefore, exemption from GST to fresh fruits
and nuts covers only such products which are not
frozen or dried in any manner as stated above or
otherwise processed. Supply of dried fruits and nuts,
falling under heading 0801 and 0802 attract GST at
the rate of 5%/12% as specified in the respective rate
Schedules.
4. Applicability of GST on tamarind seeds:
4.1 Representations have been received seeking
clarification regarding classification and applicable
GST rates on tamarind seeds. The dispute is in
classification of tamarind seeds between tariff
heading 1207 and 1209.
4.2 As per general Explanatory Notes to HS 2017,
heading 1209, covering seeds, fruit and spores, of a
kind used for sowing, covers tamarind seeds. As per
Chapter note 3 to Chapter 12, for the purposes of
heading 1209, beet seeds, grass and other herbage
seeds, seeds of ornamental flowers, vegetable seeds,
seeds of forest trees, seeds of fruit trees, seeds of
vetches (other than those of the species Vicia faba)
or of lupines are to be regarded as “seeds of a kind
used for sowing”. Thus, tamarind seeds, even if used
for any purpose other than sowing, is liable to be
classified under heading 1209 and hitherto attracted
nil GST rate, irrespective of its use (for the period
01-07-2017 to 30-09-2021).
4.3 The GST council in its 45th meeting
recommended GST rate on seeds, falling under
heading 1209, meant for any use other than sowing
to 5% (S. No. 71A of Schedule I of notification No. 38/
1/2017-Fin(R&C)(1/2017-Rate) dated 30-06-2017) and
Nil rate would apply only to seeds for this heading if
used for sowing purposes (S. No. 86 of schedule of
notification No. 38/1/2017-Fin(R&C) (2/2017-Rate)
dated 30-06-2017). Hence, with effect from 1-10-2021,
tamarind and other seeds falling under heading 1209
(i.e. including tamarind seeds), if not supplied as
seed for sowing, would attract GST at the rate of 5%.
5. Clarification of definition of Copra:
5.1. Representations have been received seeking
clarification regarding the definition of Copra and
applicable GST rates.
5.2 As per Explanatory Notes to HS (2017 edition)
to heading 1203, Copra is dried flesh of coconut
generally used for the extraction of coconut oil.
Coconut kernel turns into copra, when it separates
from the shell skin, while still being inside the shell.
The whole unbroken kernel could be taken out of
shell only when it converts to copra. Once taken out
of shell, copra could be supplied either whole or
broken.
5.3. As per the Explanatory Notes to HS, the
heading 0801 covers coconut fresh or dried but
excludes Copra. Thus, exemption available to
Coconut, fresh or dried, whether or not shelled or
peeled, vide entry at S. No. 47 of notification No. 38/
1/2017-Fin(R&C) (2/2017-Rate) dated 30-06-2017, is
not available to Copra. Accordingly, Copra,
classified under heading 1203, attracts GST rate of
5% vide entry at S. No. 66 of Schedule I of 38/1/2017-
Fin(R&C)(1/2017-Rate) dated 30-06-2017,
irrespective of use.
6. Applicability of GST on pure henna powder
and leaves:
6.1 Representations have been received seeking
clarification regarding classification and applicable
GST rates on henna powder and henna leaves.
6.2 As per the Explanatory Notes to HS 2017,
heading 1404 is vegetable products not elsewhere
specified or included. Further, as per the said
Explanatory Notes, heading1404 includes raw
vegetable materials of a kind used primarily in
dyeing or tanning. Such products are used primarily
in dyeing or tanning either directly or in preparation
of dyeing or tanning extracts. The material may be
untreated, cleaned, dried, ground or powdered
(whether or not compressed).
6.3 Accordingly, it is clarified that pure henna
powder and henna leaves, having no additives, is
classifiable under tariff item 1404 90 90 and shall
attract GST rate of 5% (S. No.78 of schedule I of
notification No. 38/1/2017-Fin(R&C)(1/2017-Rate)
dated 30-06-2017).
6.4. Further, the GST rate on mehndi paste in cones
falling under heading 1404 and 3305 shall be 5% (S.
No. 78A of schedule I of notification No. 38/1/2017-
Fin(R&C)(1/2017-Rate) dated 30-06-2017).
7. Applicability of GST on scented sweet supari
& flavored and coated illaichi:
7.1 Representations have been received seeking
clarification regarding classification and applicable
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GST rates on flavoured and coated illaichi, and
scented sweet supari.
7.2 Scented sweet supari falls under tariff item
2106 90 30 as “Betel nut product” known as “Supari”
and attracts GST rate of 18% vide entry at S. No. 23 of
Schedule III of notification No. 38/1/2017-Fin(R&C)(1/
2017-Rate) dated 30-06-2017.
7.3 Flavored and coated illaichi generally consists
of Cardamom Seeds, Aromatic Spices, Silver Leaf,
Saffron, Artificial Sweeteners. It is distinct from
illaichi or cardamom (which falls under heading
0908). It is clarified that flavored and coated illaichi
is a value added product and falls under sub-heading
2106. It accordingly attract GST at the rate of 18% (S.
No. 23 of schedule III of notification No. 38/1/2017-
Fin(R&C)(1/2017-Rate) dated 30-06-2017).
8. Applicability of GST on Brewers’ Spent Grain
(BSG), Dried Distillers’ Grains with Soluble [DDGS]
and other such residues:
8.1 Representations have been received seeking
clarification regarding classification and applicable
GST rates on Brewers’ spent grain (BSG), Dried
distillers’ grains with soluble [DDGS] and other such
residues of starch manufacture and similar residues,
beet-pulp, bagasse and other waste of sugar
manufacture, brewing or distilling dregs and waste,
whether or not in the form of pellets.
8.2 As per the Explanatory Notes to the HSN,
heading 2303 includes residues of starch
manufacture and similar residues (from maize (corn),
rice, potatoes, etc.); beet-pulp; bagasse; other waste
products of sugar manufacture; brewing or distilling
dregs and waste, which comprises in particular -
dregs of cereals obtained in the manufacture of beer
and consisting of exhausted grains remaining after
the wort has been drawn off; malts sprouts separated
from the malted grain during the kilning process;
spent hops; Dregs resulting from the distillation of
spirits from grain, seeds, potatoes, etc; beet pulp
wash (residues from the distillation of beet
molasses). All these products remain classified in
the heading whether presented in wet or dry.
8.3 Thus, Brewers’ spent grain (BSG), Dried
distillers’ grains with soluble [DDGS] and other such
residues are classifiable under heading 2303,
attracting GST at the rate of 5% (S. No. 104 of schedule
I of notification No. 38/1/2017-Fin(R&C)(1/2017-Rate)
dated 30-06-2017).
9. Scope of GST rate on all pharmaceutical goods
falling under heading 3006.
9.1 Entry at S. No. 65 of Schedule II of notification
No. 38/1/2017-Fin(R&C)(1/2017-Rate) dated 30-06-
2017, reads as “Pharmaceutical goods specified in
Note 4 to this Chapter [i.e. Sterile surgical catgut,
similar sterile suture materials (including sterile
absorbable surgical or dental yarns) and sterile
tissue adhesives for surgical wound closure; sterile
laminaria and sterile laminaria tents; sterile
absorbable surgical or dental haemostatics; sterile
surgical or dental adhesion barriers, whether or not
absorbable; Waste pharmaceuticals][other than
contraceptives]”.
9.2 S. No. 65 of Second Schedule of Notification
38/1/2017-Fin(R&C)(1/2017-Rate) dated 30-06-2017
refers to the note 4 to Chapter 30 of the First schedule
of the Customs Tariff Act, 1975 while mentioning an
illustrative list. Certain representations were
received seeking clarification on the applicable rate
of goods falling under heading 3006 that are not
specifically mentioned in the Entry at S. No. 65 of
Schedule II of notification No. 38/1/2017-Fin(R&C)(1/
2017-Rate) dated 30-06-2017.
9.3 Note 4 to Chapter 30 of the First schedule of
the Custom Tariff Act, 1975 reads as follows:
“(a)
sterile surgical catgut, similar sterile suture
materials (including sterile absorbable surgical
or dental yarns) and sterile tissue adhesives for
surgical wound closure;
(b)
Sterile laminaria and sterile laminaria tents;
(c)
sterile absorbable surgical or dental
haemostatics sterile surgical or dental adhesion
barriers, whether or not absorbable;
(d)
opacifying preparations for X-ray examinations
and diagnostic reagents designed to be
administered to the patient, being unmixed
products put up in measured doses or products
consisting of two or more ingredients which
have been mixed together for such uses;
(e)
blood-grouping reagents;
(f)
dental cements and other dental fillings; bone
reconstruction cements;
(g)
first-aid boxes and kits;
(h)
chemical contraceptive preparations based on
hormones, on other products of heading 2937
or on spermicides;
(i)
gel preparations designed to be used in human
or veterinary medicine as a lubricant for parts
of the body for surgical operations or physical
examinations or as a coupling agent between
the body and medical instruments; and
(j)
waste pharmaceuticals, that is, pharmaceutical
products which are unfit for their original
intended purpose due to, for example, expiry of
shelf-life.
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(k)
appliances identifiable for ostomy use, that is
colostomy, ileostomy and urostomy pouches cut
to shape and their adhesive wafers or
faceplates.”
9.4 Thus, it is clarified that said entry 65 covers
all goods as specified in Chapter Note 4 and Chapter
Note 4 in turn covers all goods covered under
Heading 3006. Therefore, said entry 65 covers all
goods falling under heading 3006, irrespective of the
fact that such goods are specifically mentioned in
said entry. Therefore, all goods falling under heading
3006 attract GST rate of 12% under entry 65 in the
12% rate schedule.
10. All laboratory reagents and other goods
falling under heading 3822:
10.1 Entry at S. No. 80 of Schedule II of notification
No.1/2017- Integrated Tax (Rate) dated 28-6-2017
prescribes GST rate of 12% for “All diagnostic kits
and reagents”.
10.2. Representations have been received
whether the benefit of concessional rate of 12%
would be available to laboratory agents and other
goods falling under heading 3822.
10.3 Heading 3822 covers “Diagnostic or
Laboratory Reagents, Certified Reference Materials
etc.”.
10.4 The issue was placed before the GST Council
and on its recommendations, it is clarified that the
intention of this entry was to prescribe GST rate of
12% to all goods, whether diagnostic or laboratory
regents, falling under heading 3822.
10.5 It is accordingly clarified that concessional
GST rate of 12% is applicable on all goods falling
under heading 3822, vide Entry at S. No. 80 of
Schedule II of notification No. 1/2017-Integrated Tax
(Rate) dated 28-6-2017.
11. Requirement of Original/import Essentiality
certificate, issued by the Directorate General of
Hydrocarbons (DGH) on each inter-State stock
transfer of goods imported at concessional GST
rate for petroleum operations.
11.1 Notification No. 38/1/2017-Fin(R&C)(3/2017-
Rate) prescribes concessional rate of 5% for specified
goods which are used in connection with specified
petroleum operations. Condition 1 (d) in notification
No. 38/1/2017-Fin(R&C)(3/2017-Rate) dated
30-06-2017 prescribes that “whenever goods so
supplied are transferred to other licensee or sub-
contractor a certificate from Directorate General of
Hydrocarbons (DGH) is to be produced that the goods
may be transferred to the transferee”.
11.2. As per Section 7 read with Schedule-I of the
Goa GST Act, 2017, inter-state stock transfer
between distinct persons (establishment of same
person located in two different states) is considered
as ‘supply’ of goods.
11.3. Representations have been received seeking
clarification whether the original/import
Essentiality certificate can be used for such inter-
state stock transfers or a fresh Essentiality certificate
would be required for each inter-state stock transfer
as it is being treated as supply subject to IGST.
11.4. GST Council deliberated upon this issue and
a decision was taken that the original/import
Essentiality certificate, issued by the Directorate
General of Hydrocarbons (DGH) is sufficient and
there is no need for taking a certificate every time
on inter-state movement of goods within the same
company/stock transfer so long as the goods are the
same as those imported by the company at
concessional rate.
11.5. The importer is required to maintain records
and should be able to establish nexus between the
stock transfer of goods and the description in the
essentiality certificate.
12. GST rates applicable on External batteries
sold along with UPS/System Inverter:
12.1 References have been received seeking
clarification about whether,‘UPS Systems/inverter
sold along with batteries as integral part’ are
classified under heading 8507 at 28% GST or under
heading 8504 at 18% GST.
12.2 The matter has been examined and it is
observed that even if the UPS/inverter and external
battery are sold on the same invoice, their price are
separately known, and they are two separately
identifiable items. Thus, this constitutes supply of
two distinctly identifiable items on one invoice.
Therefore, it is clarified that in such supplies, UPS/
inverter would attract GST rate of 18% under heading
8504, while external batteries would attract the GST
rate as applicable to it under heading 8507 (28% for
all batteries except lithium-ion battery).
13. Applicability of GST rates on Solar PV Power
Projects.
13.1 Representations have been received seeking
clarification regarding the GST rates applicable on
Solar PV Power Projects on or before 1st January,
2019. The issue seems to have arisen in the context
of Notification No. 38/1/2017-Fin(R&C)(24/2018-
Rate), dated 31st December, 2018. An explanation
was inserted vide the said notification that GST on
specified Renewable Energy Projects can be paid in
terms of the 70:30 ratio for goods and services,
respectively, with effect from 1st January, 2019. The
request has been that same ratio (for deemed value)
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749
may be applied in respect of supplies made before
1-1-2019.
13.2 As per this explanation, if the goods specified
in this entry are supplied, by a supplier, along with
supplies of other goods and services, one of which
being a taxable service specified in the entry at
S. No. 38 of the Table mentioned in the notification
No. 38/1/2017-Fin(R&C)(11/2017-Rate), dated 30th
June, 2017, the value of supply of goods for the
purposes of this entry shall be deemed as seventy
per cent. of the gross consideration charged for all
such supplies, and the remaining thirty per cent. of
the gross consideration charged shall be deemed
as value of the said taxable service. This mechanism
for valuation of supply was recommended by the
Council considering that it adequately represented
the value of goods and services involved in the
supply.
13.3 The GST Council has now decided to clarify
that GST on such specified Renewable Energy
Projects can be paid in terms of the 70:30 ratio for
goods and services, respectively, for the period of
1st July, 2017 to 31st December, 2018, in the same
manner as has been prescribed for the period on or
after 1st January, 2019, as per the explanation in the
Notification No. 38/1/2017-Fin(R&C)(24/2018-Rate),
dated 31st December, 2018. However, it is specified
that, no refunds will be granted if GST already paid
is more than the amount determined using this
mechanism.
14. Applicability of GST rates on Fibre Drums,
whether corrugated or non-corrugated:
14.1 Hitherto, corrugated boxes and cartons,
falling under heading 4819 attracted GST at the rate
of 12% (entry 122 of 12% rate schedule), while other
cartons falling under this heading attracted GST at
the rate of 18%. Disputes have arisen as regards
applicable GST on fibre drums, which is partially
corrugated (as to whether it is be treated as
corrugated or otherwise). This dispute gets resolved
on account of the recommendation of the GST
Council, in its 45th meeting, to prescribe a uniform
GST rate of 18% on all goods classifiable under
heading 4819 (with effect from 1st October, 2021
under S. No. 153A of Schedule III of notification No.
38/1/2017-Fin(R&C)(1/2017-Rate) dated 30-06-2017).
14.2 For the period prior to 1-10-2021, the Council
upon taking note of the fact that there was an
ambiguity regarding the GST rates applicable on a
Fibre Drums, because of its peculiar construction
(partially corrugated), has decided that supplies of
such Fibre Drums even if made at 12% GST (during
the period from 1-7-2017 to 30-9-2021), would be
treated as fully GST paid. Therefore, no action for
recovery of differential tax (over and above 12%
already paid) would arise. However, as this decision
has only been taken to regularize the past practice
in view of certain ambiguity, as detailed in para 14.1,
no refund of GST already paid shall be allowed if
already paid at 18%.
15. Difficulty, if any, in implementation of this
Circular may please be brought to the notice of the
undersigned.
Hemant
Kumar,
IAS,
Commissioner
State Tax, Goa.
Panaji, 26th November, 2021.
Note: Similar circular is issued under Central Goods
and Services Tax Act, 2017 by the GST Policy wing, Central
Board of Indirect Taxes and Customs, Department of
Revenue, Ministry of Finance, GOI, New Delhi vide Circular
No. 163/19/2021-GST dated 6th October, 2021.
-----------------
CCT/26-4/2017-18/E/2184
Circular
(No. 17/2021-22-GST)
Subject: Clarifications regarding applicable GST
rates & exemptions on certain services-reg.
Representations have been received seeking
clarification in respect of applicable GST rates on the
following activities:
1.
Services by cloud kitchens/central kitchens,
2.
Supply of ice cream by ice cream parlors,
3.
Coaching services to students provided by
coaching institutions and NGOs under the
central sector scheme of “Scholarships for
students with Disabilities”,
4.
Satellite launch services provided by NSIL.
5.
Overloading charges at toll plaza,
6.
Renting of vehicles by State Transport
Undertakings and Local Authorities,
7.
Services by way of grant of mineral exploration
and mining rights attracted GST,
8.
Admission to amusement parks having rides
etc.,
9.
Services supplied by contract manufacture to
brand owners or others for manufacture of
alcoholic liquor for human consumption.
2. The issues have been examined by GST Council
in the 45th meeting of the Council held on17th
September, 2021. The issue-wise clarifications are
given below:
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3. Services by cloud kitchens/central kitchens:
3.1 Representations have been received
requesting for clarification regarding the
classification and rate of GST on services rendered
by Cloud kitchen or Central Kitchen.
3.2 The word “restaurant service” is defined in
Notification No. 38/1/2017-Fin(R&C)(11/2017-Rate)
as below:-
“Restaurant service” means supply, by way of or
as part of any service, of goods, being food or any
other article for human consumption or any drink,
provided by a restaurant, eating joint including mess,
canteen, whether for consumption on or away from
the premises where such food or any other article for
human consumption or drink is supplied.”
3.3 The explanatory notes to the classification of
service state that “restaurant service” includes
services provided by Restaurants, Cafes and similar
eating facilities including takeaway services, room
services and door delivery of food. Therefore, it is clear
that takeaway services and door delivery services
for consumption of food are also considered as
restaurant service and, accordingly, service by an
entity, by way of cooking and supply of food, even if
it is exclusively by way of takeaway or door delivery
or through or from any restaurant would be covered
by restaurant service. This would thus cover services
provided by cloud kitchens/central kitchens.
3.4 Accordingly, as recommended by the Council,
it is clarified that service provided by way of cooking
and supply of food, by cloud kitchens/central
kitchens are covered under “restaurant service, as
defined in notification No. 38/1/2017-Fin(R&C)(11/
2017-Rate) and attract 5% GST [without ITC].
4. Supply of ice cream by ice cream parlors:
4.1 Representations have been received
requesting for clarification regarding the supplies
provided in an ice cream outlet.
4.2 Ice cream parlors sell already manufactured
ice-cream and they do not have a character of a
restaurant. Ice-cream parlors do not engage in any
form of cooking at any stage, whereas, restaurant
service involves the aspect of cooking/preparing
during the course of providing service. Thus, supply
of ice-cream parlor stands on a different footing than
restaurant service. Their activity entails supply of
ice cream as goods (a manufactured item) and not as
a service, even if certain ingredients of service are
present.
4.3 Accordingly, as recommended by the Council,
it is clarified that where ice cream parlors sell already
manufactured ice-cream and do not cook/prepare
ice-cream for consumption like a restaurant, it is
supply of ice cream as goods and not as a service,
even if the supply has certain ingredients of service.
Accordingly, it is clarified that ice cream sold by a
parlor or any similar outlet would attract GST at the
rate of 18%.
5. Coaching services supplied by coaching
institutions and NGOs under the central sector
scheme of ‘Scholarships for students with
Disabilities”
5.1 Representations have been received seeking
clarification regarding applicability of GST on free
coaching services provided by coaching institutions
and NGOs under the central scheme of “Scholarships
for students with Disabilities” where entire
expenditure is provided by Government to coaching
institutions by way of grant in aid.
5.2 In this regard, it is to mention that entry 72 of
notification No. 38/1/2017-Fin(R&C)(12/2017-Rate)
dated 30th June, 2017, exempts services provided to
the Central Government, State Government, Union
territory administration under any training
programme for which total expenditure is borne by
the Central Government, State Government, Union
territory administration.
5.3 The scope of this entry is wide enough to cover
coaching services provided by coaching institutions
and NGOs under the central scheme of “Scholarships
for students with Disabilities” where total
expenditure is borne by the Government by way of
funding to institute providing such coaching.
5.4 Accordingly, as recommended by the GST
Council, it is clarified that services provided by any
institutions/NGOs under the central scheme of
“Scholarships for students with Disabilities” where
total expenditure is borne by the Government is
covered under entry 72 of notification No. 38/1/2017-
Fin(R&C)(12/2017-Rate) dated 30th June, 2017 and
hence exempt from GST.
6. Satellite launch services provided by NSIL.
6.1 Representation has been received for issuance
of a clarification recognizing Satellite Launch
Services supplied by M/s New Space India Limited
(NSIL), a wholly-owned Government of India
Company under the administrative control of
Department of Space (DoS), to international
customers as “Export of Service”.
6.2 It has been clarified vide Circular No. 2/1/2017-
IGST dated 27-09-2017 that Place of Supply (PoS) of
satellite launch services supplied by ANTRIX
Corporation Ltd. to customers located outside India
is outside India and such supply which meets the
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requirements of Section 2(6) of IGST Act, constitutes
export of service and shall be zero rated. If the service
recipient is located in India, the satellite launch
services would be taxable.
6.3 As recommended by the Council, it is clarified
that as the satellite launch services supplied by NSIL
are similar to those supplied by ANTRIX Corporation
Ltd., the said circular No. 2/1/2017-IGST dated
27-09-2017, is applicable to them.
7. GST on overloading charges at toll plaza.
7.1 Representations have been received seeking
clarification regarding applicability of GST on
Overloading charges collected at Toll Plazas.
7.2 Entry 23 of notification No. 38/1/2017-
Fin(R&C)(12/2017-Rate) dated 30th June, 2017,
exempts Service by way of access to a road or a bridge
on payment of toll charges road or a bridge on
payment of toll charges.
7.3 Vide notification dated 25th Sep., 2018, issued
by Ministry of Road Transport and Highways,
overloaded vehicles were allowed to ply on the
national highways after payment of fees with
multiplying factor of 2/4/6/8/10 times the base rate
of toll. Therefore, it essence overloading fees are
effectively higher toll charges.
7.4 As recommended by the GST Council, it is
clarified that overloading charges at toll plazas
would get the same treatment as given to toll
charges.
8. Renting of vehicles to State Transport
Undertakings and Local Authorities:
8.1 Representations have been received seeking
clarification regarding eligibility of the service of
renting of vehicles to State Transport Undertakings
(STUs) and Local Authorities for exemption from GST
under notification No. 38/1/2017-Fin(R&C)(12/2017-
Rate) dated 30th June, 2017. Sl. No. 22 of this
notification exempts “services by way of giving on
hire(a) to a state transport undertaking, a motor
vehicle meant to carry more than twelve passengers;
or (aa) to a local authority, an Electrically Operate
vehicle meant to carry more than twelve
passengers”.
8.2 This issue has arisen in the wake of ruling
issued by an Authority for Advance Ruling that the
entry at Sl. No. 22 of notification No. 38/1/2017-
Fin(R&C)(12/2017-Rate) exempts services by way of
giving on hire vehicles to a State Transport
Undertaking or a local authority and not renting of
vehicles to them. The ruling referred to certain case
laws pertaining to erstwhile positive list based
service tax regime.
8.3 It is relevant to note in this context that
Schedule II of Goa GST Act, 2017 declares supply of
any goods without transfer of title as supply of
service even if right to use is transferred. Transfer of
right to use has been declared as a supply of service
[Schedule II, Entry 5(f) refers]
8.4 The issue was placed before the 45th GST
Council Meeting held on 17-09-2021. As
recommended by the GST Council, it is clarified that
the expression “giving on hire” in Sl. No. 22 of the
Notification No. 38/1/2017-Fin(R&C)(12/2017-Rate)
includes renting of vehicles. Accordingly, services
where the said vehicles are rented or given on hire
to State Transport Undertakings or Local Authorities
are eligible for the said exemption irrespective of
whether such vehicles are run on routes, timings as
decided by the State Transport Undertakings or Local
Authorities and under effective control of State
Transport Undertakings or Local Authorities which
determines the rules of operation or plying of
vehicles.
9. Services by way of grant of mineral
exploration and mining rights:
9.1 Representations have been received
requesting for clarification as to the rate of GST
applicable on supply of services by way of granting
mineral exploration and mining rights during the
period from 1-07-2017 to 31-12-2018. With effect from
1-1-2019, the rate schedule has been specifically
amended and it is undisputed since then that such
service attracts GST at the rate of 18%.
9.2
For the disputed period [1-7-2017 to
31-12-2018], divergent rulings have been issued by
Authorities for Advance Ruling (AAR) and Appellate
Authorities for Advance Ruling (AAAR) of various
States on the GST rate applicable on the same. AAR,
Haryana in case of M/s Pioneer Partners and AAR,
Chhattisgarh in case of M/s NMDC have ruled that
the service of grant of mining leases is classifiable
under Service Code 997337 (licensing services for the
right to use minerals including its exploration and
evaluation) and attracted, prior to 01-01-2019, the
same rate of GST as applicable to minerals, that is,
5% as prescribed against Sl. No.17, item (viii) of
Notification No. 38/1/2017-Fin(R&C) (11/2017-Rate).
The rate prescribed against this entry prior to
01-01-2019 was “the same rate as applicable on
supply of like goods involving transfer of title in
goods”. In certain other advance rulings, a view has
been taken that grant of rights for mineral exploration
and mining would be covered under heading 9991
and would attract GST at the rate of 18%.
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9.3 AAAR, Odisha, on the other hand has rule vide
Order dated 5-11-2019 in the case of M/s Penguin
Trading and Agencies Limited that grant of mining
lease was taxable @ 18% prior to 01-01-2019.The
Appellate Authority in this case observed that GST
rate applicable against Sl. No. 17 item (viii) of
Notification No. 38/1/2017-Fin(R&C)(11/2017-Rate)
prior to 01-01-2019 was not implementable. Unlike
leasing or renting of goods, there are no underlying
goods in case of leasing of mining area. The rate
prescribed for goods cannot be made applicable to
leasing of mining area, which confers the right to
extract and appropriate minerals. The mining lease
by Government, not being a lease of any goods,
cannot attract the rate applicable to sale of like goods.
Appellate Authority for Advance Ruling, Odisha has
further held that the amendment carried out vide
Notification No. 38/1/2017-Fin(R&C)(27/2018-Rate),
dated 31-12-2018, which restricted the “same rate as
applicable to supply of goods involving transfer of
title in goods” only to leasing or renting of goods
was to clarify the legislative intent as well as to
resolve the unintended interpretation. It is a settled
law that interpretation which defeats the intention
of legislature cannot be adopted. It accordingly
upheld that “licensing services for the right to use
minerals including its exploration and evaluation”
falling under service code 997337 were taxable @18%
during 01-07-2017 to 31-12-2018.
9.4
It may be noted that the expression “same
rate of tax as applicable on supply of like goods
involving transfer of title in goods” applies in case of
leasing or renting of goods. In case of grant of mining
rights, there is no leasing or renting of goods. Hence,
the said entry does not extend to grant of mining
rights which is an entirely different activity.
9.4.1 The issue was place before the GST Council
in its 45th meeting held on 17-09-2021.
9.5
As regards classification of service, it was
recommended by the Council that service by way of
grant of mineral exploration and mining rights most
appropriately fall under service code 997337, i.e.
“licensing services for the right to use minerals
including its exploration and evaluation”.
9.6 As regards the applicable rate for the period
from 1-7-2017 to 31-12-2018, the council took note of
the following facts, namely,-
(i) GST Council in its 4th meeting held on 3rd &
4th November, 2016 had decided that supply
of services shall be generally taxed at the rate
of 18%.
(ii) More importantly, the GST Council in its 14th
meeting held on 18th & 19th May, 2019, while
recommending the rate schedules of services
(5%, 12%, 18% and 28%), specifically
recommended that all the residuary services
would attract GST at the rate of 18%.
(iii) The rate applicable on the service of grant of
mineral exploration license and mining lease
under Service Tax was also the standard rate
of 15.5%. Services under this category have
been standard rated in GST at 18%.
(iv) Therefore, the intention has always been to tax
this activity/supply at standard rate of 18%.
9.7 Accordingly, as recommended by the Council,
it is clarified that even if the rate schedule did not
specifically mention the service by way of grant of
mining rights, during the period 1-7-2017 to
31-12-2018, it was taxable at 18% in view of principle
laid down in the 14th meeting of the Council for
residuary GST rate. Post, 1stJanuary, 2019 no dispute
remains as stated above.
10. Admission to indoor amusement parks having
rides etc.
10.1 Representations have been received
requesting for clarification regarding applicable rate
of GST on services provided by Indoor Amusement
Parks/Family Entertainment Centers, and scope of
the word “amusement park” under entry 34(iii) of
Notification No. 38/1/2017-Fin(R&C)(11/2017-Rate).
10.2 Entry 34(iii) notification No.38/1/2017-
Fin(R&C)(11/2017-Rate), prior to 01-10-2021,
prescribed 18% GST on the services by way of
admission to amusement parks including theme
parks, water parks, joy rides, merry-go rounds, go-
carting and ballet. On the other hand, Entry No.
34(iiia) in Notification No. 38/1/2017-Fin(R&C)(11/
2017-Rate) dated 30-06-2017 prescribed GST rate of
28% on the services by way of admission to
entertainment events or access to amusement
facilities including casinos, race club, any sporting
event such as Indian Premier League and the like.
10.3 On the recommendations of the Council, it is
clarified that 28% rate [entry 34 (iiia)] applies on
admission to a place having casino or race club [even
if it provides certain other activities] or admission to
a sporting event like IPL. On the other hand, Entry 34
(iii), having a rate of 18%, covers all other cases of
admission to amusement parks, or theme park etc or
any place having joy rides, merry- go rounds, go-
carting etc. whether indoor or outdoor, so long as no
access is provided to a casino or race club. This
clarification will also apply to Entries 34(iii) and 34
(iiia) as they existed prior to their amendment w.e.f.
01-10-2021.
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10.4 The entries in question have been suitably
amended vide notification No.38/1/2017-
Fin(R&C)(06/2021-Rate)/1913 dated 30-09-2021 to
make them clearer.
11. Services supplied by contract manufacturers
to brand owners for manufacture of alcoholic liquor
for human consumption
11.1 Representations have been received
requesting for issuing a clarification that the job work
services supplied by contract manufacturers to
brand owners for manufacture of alcoholic liquor for
human consumption attract GST @ 5% prescribed
for job work services in relation to food and food
products, in terms of Sl. No. 26 [Item 1(i)f] of
notification No. 38/1/2017-Fin(R&C)(11/2017-Rate)
dated 30-6-2017. This entry prescribes GST rate of 5%
on services by way of job work in relation to food and
food products falling under chapters 1 to 22 in the
first Schedule to the Customs Tariff Act, 1975.
11.2 The issue was placed before the GST Council
in its 45th meeting held on 17th September, 2021.The
Council had also deliberated upon this issue in its
39th and 40th meeting.
11.3 As recommended by GST Council, it is clarified
that the expression “food and food products” in the
said entry excludes alcoholic beverages for human
consumption. As such, in common parlance also
alcoholic liquor is not considered as food.
Accordingly, services by way of job work in relation
to manufacture of alcoholic liquor for human
consumption are not eligible for the GST rate of 5%
prescribed under the said entry. GST Council
recommended that such job work would attract GST
at the rate of 18%.
12. Difficulty, if any, in implementation of this
Circular may please be brought to the notice of the
undersigned.
Hemant
Kumar,
IAS,
Commissioner,
State Tax, Goa.
Panaji, 26th November, 2021.
Note: Similar circular is issued under Central Goods and
Services Tax Act, 2017 by the GST Policy wing, Central Board
of Indirect Taxes and Customs, Department of Revenue,
Ministry of Finance, GOI, New Delhi vide Circular No. 164/
20/2021-GST dated 6th October, 2021.
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