355

OFFICIAL GAZETTE — GOVT. OF GOA

SERIES I No. 28

( EXTRAORDINARY )

13TH OCTOBER, 2006

355

__________________________________________________________________________________________

Suggestions are welcomed on e-mail: [email protected]

EXTRAORDINARY

No. 2

GOVERNMENT OF GOA

Department of Finance

Office of the Commissioner of Commercial Taxes

—–

No. CCT/26-4/2024-25/G/1608

Subject: Reduction of Government Litigation–fixing monetary limits for filing appeals or applications by

the Department before GSTAT, High Courts and Supreme Court–reg.

Ref.: Circular No. 207/01/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 01/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

SERIES II No. 17

Panaji, 30th July, 2024 (Sravana 8, 1946)

Reg. No. RNP/GOA/32/2024-26

RNI No. GOAENG/2002/6410

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ANNEXURE

Circular No. 207/1/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

****

North Block, New Delhi

Dated the 26th June, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/

/Principal Commissioners/Commissioners of Central Tax (All)

The Principal Directors General/Directors General of Central Tax (All)

Madam/Sir,

Subject: Reduction of Government Litigation – fixing monetary limits for filing appeals or applications by

the Department before GSTAT, High Courts and Supreme Court-reg.

Reference is invited to the National Litigation Policy which was conceived with the aim of optimizing

the utilization of judicial resources and expediting the resolution of pending cases. It underscores the

importance of prudent litigation practices by establishing thresholds for filing appeals in Revenue

matters. Specifically, the Policy mandates that appeals should not be pursued when the amount involved

is below a specified monetary limit set by Revenue authorities. Furthermore, it discourages filing appeals

in cases where established precedents from Tribunals and High Courts have settled the matter and have

not been contested in the Supreme Court.

1.1 Section 120 of the Central Goods and Services Tax Act, 2017 (hereinafter referred as ―the CGST

Act‖) provides for power to the Central Board of Indirect Taxes & Customs (hereinafter referred to as

―the Board‖) for fixing the monetary limits for filing of appeal or application by the tax authorities as

below:

―120. Appeal not to be filed in certain cases.—

(1) The Board may, on the recommendations of the Council, from time to time, issue orders or

instructions or directions fixing such monetary limits, as it may deem fit, for the purposes of

regulating the filing of appeal or application by the officer of the central tax under the

provisions of this Chapter.

(2) Where, in pursuance of the orders or instructions or directions issued under sub-section (1), the

officer of the central tax has not filed an appeal or application against any decision or order

passed under the provisions of this Act, it shall not preclude such officer of the central tax from

filing appeal or application in any other case involving the same or similar issues or questions of

law.

(3) Notwithstanding the fact that no appeal or application has been filed by the officer of the

central tax pursuant to the orders or instructions or directions issued under sub-section (1), no

person, being a party in appeal or application shall contend that the officer of the central tax

has acquiesced in the decision on the disputed issue by not filing an appeal or application.

(4) The Appellate Tribunal or court hearing such appeal or application shall have regard to the

circumstances under which appeal or application was not filed by the officer of the central tax

in pursuance of the orders or instructions or directions issued under sub-section (1).‖

2. Accordingly, in exercise of the powers conferred by Section 120 of the CGST Act read with Section

168 of the CGST Act, the Board, on the recommendations of the GST Council, fixes the following

monetary limits below which appeal or application or Special Leave Petition, as the case may be, shall

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not be filed by the Central Tax officers before Goods and Service Tax Appellate Tribunal (GSTAT), High

Court and Supreme Court under the provisions of CGST Act, subject to the exclusions mentioned in para

4 below:

Appellate Forum

Monetary Limit (amount involved

in Rs.)

GSTAT

20,00,000/-

High Court

1,00,00,000/-

Supreme Court

2,00,00,000/-

While determining whether a case falls within the above monetary limits or not, the following

principles are to be considered:

i. Where the dispute pertains to demand of tax (with or without penalty and/or interest), the

aggregate of the amount of tax in dispute (including CGST, SGST/UTGST, IGST and

Compensation Cess) only shall be considered while applying the monetary limit for filing

appeal.

ii. Where the dispute pertains to demand of interest only, the amount of interest shall be

considered for applying the monetary limit for filing appeal.

iii. Where the dispute pertains to imposition of penalty only, the amount of penalty shall be

considered for applying the monetary limit for filing appeal.

iv. Where the dispute pertains to imposition of late fee only, the amount of late fee shall be

considered for applying the monetary limit for filing appeal.

v. Where the dispute pertains to demand of interest, penalty and/or late fee (without involving

any disputed tax amount), the aggregate of amount of interest, penalty and late fee shall be

considered for applying the monetary limit for filing appeal.

vi. Where the dispute pertains to erroneous refund, the amount of refund in dispute (including

CGST, SGST/UTGST, IGST and Compensation Cess) shall be considered for deciding whether

appeal needs to be filed or not.

vii. Monetary limit shall be applied on the disputed amount of tax/interest/penalty/late fee, as the

case may be, in respect of which appeal or application is contemplated to be filed in a case.

viii. In a composite order which disposes more than one appeal/demand notice, the monetary limits

shall be applicable on the total amount of tax/interest/penalty/late fee, as the case may be, and

not on the amount involved in individual appeal or demand notice.

4. EXCLUSIONS

Monetary limits specified above for filing appeal or application by the department before GSTAT or

High Court and for filing Special Leave Petition or appeal before the Supreme Court shall be applicable in

all cases, except in the following circumstances where the decision to file appeal shall be taken on merits

irrespective of the said monetary limits:

Where any provision of the CGST Act or SGST/UTGST Act or IGST Act or GST (Compensation to

States) Act has been held to be ultra vires to the Constitution of India; or

ii.

Where any Rules or regulations made under CGST Act or SGST/UTGST Act or IGST Act or GST

(Compensation to States) Act have been held to be ultra vires the parent Act; or

iii.

Where any order, notification, instruction, or circular issued by the Government or the Board has

been held to be ultra vires of the CGST Act or SGST/UTGST Act or IGST Act or GST

(Compensation to States) Act or the Rules made thereunder; or

iv.

Where the matter is related to–

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a. Valuation of goods or services; or

b. Classification of goods or services; or

c. Refunds; or

d. Place of Supply; or

e. Any other issue,

which is recurring in nature and/or involves interpretation of the provisions of the Act/the

Rules/notification/circular/order/instruction etc; or

v. Where strictures/adverse comments have been passed and/or cost has been imposed against

the Government/Department or their officers; or

vi. Any other case or class of cases, where in the opinion of the Board, it is necessary to contest in

the interest of justice or revenue.

5. It is pertinent to mention that an appeal should not be filed merely because the disputed tax

amount involved in a case exceeds the monetary limits fixed above. Filing of appeal in such cases is to

be decided on merits of the case. The officers concerned shall keep in mind the overall objective of

reducing unnecessary litigation and providing certainty to taxpayers on their tax assessment while

taking a decision regarding filing an appeal.

6. Attention is drawn to sub-sections (2), (3) & (4) of Section 120 of the CGST Act, which provide that

in cases where it is decided not to file appeal in pursuance of these instructions, such cases shall not

have any precedent value. In such cases, the Reviewing Authorities shall specifically record that ―even

though the decision is not acceptable, appeal is not being filed as the amount involved is less than the

monetary limit fixed by the Board.‖

6.1 Non-filing of appeal based on the above monetary limits, shall not preclude the tax officer from

filing appeal or application in any other case involving the same or similar issues in which the tax in

dispute exceeds the monetary limit or case involving the questions of law.

6.2 Further, it is re-iterated that in such cases where appeal is not filed solely on the basis of the

above monetary limits, there will be no presumption that the Department has acquiesced in the

decision on the disputed issues in the case of same tax payers or in case of any other taxpayers.

Accordingly, in case any prior order is being cited or relied upon by the taxpayer, claiming that the

same has been accepted by the Department, it must be checked as to whether such order was

accepted only on account of the monetary limit before following them in the name of judicial

discipline.

6.3 Also, in respect of such cases where no appeal is filed based on the monetary limit, the

Departmental representatives/counsels must make every effort to bring to the notice of the GSTAT or

the Court, as the case may be, that the appeal in such cases was not filed only for the reason of the

amount of the tax in dispute being less than the specified monetary limit and, therefore, no inference

shall be drawn that the decisions rendered therein were acceptable to the Department. Accordingly,

they should draw the attention of the GSTAT or the Court towards the provisions of sub-section (4) of

Section 120 of the CGST Act, 2017 as reproduced in para 1.1 above.

7. The above may be brought to the notice of all concerned.

8. Difficulties, if any, in implementation of this circular may be informed to the Board (gst-

[email protected]).

9. Hindi version will follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

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No. CCT/26-4/2024-25/G/1609

Subject: Clarifications on various issues pertaining to special procedure for the manufacturers of the

specified commodities as per Notification No. 04/2024-Central Tax dated 05-01-2024-reg.

Ref.: Circular No. 208/02/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 02/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 208/2/2024-GST

F.No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

(Department of Revenue)

Central Board of Indirect Taxes and Customs

GST Policy Wing

*****

North Block, New Delhi

Dated the 26th June, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/

/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

Madam/Sir,

Subject: Clarifications on various issues pertaining to special procedure for the manufacturers of the

specified commodities as per Notification No. 04/2024-Central Tax dated 05-01-2024–reg.

Based on the recommendation of 50th GST Council meeting, a special procedure was notified vide

Notification No. 30/2023-Central Tax dated 31-07-2023 to be followed by the registered persons engaged

in manufacturing of goods mentioned in the schedule to the said notification. The said notification has

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360

been rescinded vide Notification No. 03/2024-Central Tax dated 05-01-2024 and a revised special

procedure has been notified vide Notification No. 04/2024-Central Tax dated 05-01-2024.

2. Representations have been received from various trade associations seeking clarity on some issues

pertaining to the said special procedure. To ensure uniformity in the implementation of the provisions of

law across the field formations, the Board, in exercise of its powers conferred by Section 168 (1) of the

Central Goods & Services Tax Act, 2017 (hereinafter referred to as the ―CGST Act‖), hereby clarifies

various issues as under:

S. No.

Issued raised by Trade

Clarification on the issue

Non availability of make, model number and

machine number-

The trade bodies have raised the issue that

some of the manufacturers of the said goods

are using very old packing machines since

decades including second hand machines.

Therefore, the details of make, model number

and machine number of these machines are

not readily available.

It is clarified that in Table 6 of FORM GST

SRM-I

notified

vide

Notification

No. 04/2024-CT dated 05-01-2024, make and

model number are optional. However, where

make of the machine is not available, the year

of purchase of the machine may be declared

as the make number. It is also clarified that

the machine number is a mandatory field in

Table 6 of FORM GST SRM-I to be filled up by

the manufacturer. If the machine number is

not available either on the machine or as per

the available documents/records, then the

manufacturer

may

assign

any

numeric

number to the said machine and provide the

details of the same in Table 6 of FORM GST

SRM-I.

In cases where the electricity consumption

rating of the packing machine is not available

in the specifications of the said machine or in

the documents/record of the same, then how

to declare the electricity consumption rating

of the said machine in Table 6 of FORM GST

SRM-I?

It is clarified that electricity consumption

rating of the packing machine is to be

declared in Table 6 of FORM GST SRM-I on

the basis of details of the same as available

either

the

machine

the

documents/record

the

said

machine.

However, if the same is not available either on

the machine or in the documents/records,

then

the

manufacturer

may

get

such

electricity consumption per hour of the said

machine calculated through a Chartered

Engineer and get the same certified by the

said Chartered Engineer in the

format

prescribed in FORM GST SRM-III, as notified

vide

Notification

No.

04/2024-CT

dated

05-01-2024. The said electricity consumption

rating can be declared in Table 6 of FORM

GST SRM-I accordingly. The copy of such

certificate of the Chartered Engineer needs to

be uploaded along with FORM GST SRM-I.

The details of the documents so uploaded

needs to be provided in Table 10 of the said

form. It is also clarified that in cases where

there are certificates of Chartered Engineer

for more than one machine, then all such

certificates may be uploaded in a single PDF

file.

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Which value has to be reported in Column 8

of Table 9 of FORM GST SRM-II in case of

goods having no MRP, for example, goods

manufactured for export market?

In cases where there is no MRP of the

package, then the sale price of the goods so

manufactured shall be entered in Column 8 of

Table 9 of FORM GST SRM-II as notified vide

Notification No. 04/2024-CT dated 05-01-2024.

What

should

the

qualification

and

eligibility of the Chartered Engineer for

providing

Chartered

Engineer

certificate

under the special procedure notified vide

Notification No. 04/2024-CT dated 05-01-2024?

It is clarified that a Practicing Chartered

Engineer having a certificate of practice from

the Institute of Engineers India (IEI) is

qualified to provide Chartered Engineer

certificate under the special procedure notified

vide

Notification

No.

04/2024-CT

dated

05-01-2024.

Whether the special procedure notified vide

Notification No. 04/2024-CT dated 05-01-2024

is applicable to the manufacturing units

located in Special Economic Zone (SEZ)?

It is clarified that the special procedure as

notified vide Notification No. 04/2024-CT

dated 05-01-2024 is not applicable to the

manufacturing

units

located

Special

Economic Zone.

Whether the special procedure notified vide

Notification No. 04/2024-CT dated 05-01-2024

is applicable to the manual processes using

electric operated heat sealer and seamer?

It is clarified that the said special procedure

notified vide Notification No. 04/2024-CT

dated 05-01-2024 is not applicable in respect

of manual seamer/sealer being used for

packing operations. Further, it is also clarified

that the said special procedure is not

applicable in respect of manual packing

operations such as those in cases of post-

harvest packing of tobacco leaves.

In cases where multiple machines are

required for filling, capping and packing of

containers, the serial number of which

machine is required to be declared in Table 6

of FORM GST SRM-I?

It is clarified that in a manufacturing process

there may be different machines being used

such as one for filling of packages, another for

putting seal on the packages and another for

final packing. The detail of that machine is

required to be reported in Table 6 of FORM

GST SRM-I which is being used for final

packing of the packages of the specified

goods.

case

job

work

contract

manufacturing,

which

person

shall

required

comply

with

the

special

procedure

notified

vide

Notification

No. 04/2024-CT dated 05-01-2024?

It is clarified that the special procedure

notified vide Notification No. 04/2024-CT

dated 05-01-2024 shall be applicable to all

persons involved in manufacturing process

including a job worker/contract manufacturer.

However,

the

job

worker/contract

manufacturer

unregistered,

then

the

liability to comply with the said special

procedure will be of the concerned principal

manufacturer.

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3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

4. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board.

Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1610

Subject: Clarification on the provisions of Clause (ca) of Section 10(1) of the Integrated Goods and

Service Tax Act, 2017 relating to place of supply of goods to unregistered persons–reg.

Ref.: Circular No. 209/03/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 03/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 209/3/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

****

North Block, New Delhi

Dated the 26th June, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/

/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

Madam/Sir,

Subject: Clarification on the provisions of Clause (ca) of Section 10(1) of the Integrated Goods and Service

Tax Act, 2017 relating to place of supply of goods to unregistered persons–reg.

Vide Notification 02/2023-Integrated Tax dated 29th September, 2023, the provisions of the Integrated

Goods and Services Tax (Amendment) Act, 2023 (31 of 2023) came into force with effect from 01-10-2023.

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2. Clause (ca) has been inserted in Section 10(1) of the Integrated Goods and Services Tax Act, 2017

(hereinafter referred to as the ―IGST Act‖) with effect from 01-10-2023. The same is reproduced as under:

―(ca) where the supply of goods is made to a person other than a registered person, the place of

supply shall, notwithstanding anything contrary contained in Clause (a) or Clause (c), be the location as

per the address of the said person recorded in the invoice issued in respect of the said supply and the

location of the supplier where the address of the said person is not recorded in the invoice.

Explanation.— For the purposes of this clause, recording of the name of the State of the said person

in the invoice shall be deemed to be the recording of the address of the said person;‖

2.1 The said provision has been inserted as a non-obstante provision overriding the provisions under

Section 10(1)(a) or 10(1)(c) of IGST Act. The Clause (ca) provides that where the supply of goods is made

to an unregistered person, the place of supply would be the location as per the address of the said

person recorded in the invoice and the location of the supplier where the address of the said person is

not recorded in the invoice. An explanation has also been added to the said Clause to clarify that

recording the name of the State of the said person shall be deemed to be the recording of the address of

the said person.

3. Reference has been received from trade and industry seeking clarification regarding the place of

supply in terms of newly added Clause (ca) of Section 10(1) of the IGST Act, in case of supply of goods

made to an unregistered person where billing address is different from the address of delivery of goods,

especially in the context of supply being made through e-commerce platforms.

4. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law

across the field formations, the Board, in exercise of its powers conferred by Section 168 (1) of the Central

Goods and Services Tax Act, 2017 hereby clarifies the issues as under:

S. No.

Issue

Clarification

Place of supply of goods (particularly being supplied through e-commerce platform) to unregistered

persons where billing address is different from the address of delivery of goods.

Mr. A (unregistered person) located in

X State places an order on an

e-commerce platform for supply of a

mobile phone, which is to be delivered

at an address located in Y State. Mr. A,

while

placing

the

order

the

e-commerce platform, provides the

billing address located in X State. In

such a scenario, what would be the

place of supply of the said supply of

mobile phone, whether the State

pertaining to the billing address i.e.

State X or the State pertaining to the

delivery address i.e. State Y?

As per the provisions of Clause (ca) of sub-section

(1) of Section 10 of IGST Act, where the supply of

goods is made to an unregistered person, the

place of supply would be the location as per the

address of the said person recorded in the invoice

and the location of the supplier where the address

of the said person is not recorded in the invoice.

Further, as per Explanation to the said Clause,

recording the name of the State of the said

unregistered person on the invoice shall be

deemed to be the recording of the address of the

said person.

Accordingly, it is clarified that in such cases

involving supply of goods to an unregistered

person, where the address of delivery of goods

recorded on the invoice is different from the billing

address of the said unregistered person on the

invoice, the place of supply of goods in

accordance with the provisions of Clause (ca) of

sub-section (1) of Section 10 of IGST Act, shall be

the address of delivery of goods recorded on the

invoice i.e. State Y in the present case where the

delivery address is located.

Also, in such cases involving supply of goods to

an unregistered person, where the billing address

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and delivery address are different, the supplier

may record the delivery address as the address of

the recipient on the invoice for the purpose of

determination of place of supply of the said supply

of goods.

5. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

Difficulty, if any, in the implementation of the above instructions may please be brought to the notice of

the Board. Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1611

Subject: Clarification on valuation of supply of import of services by a related person where recipient is

eligible to full input tax credit–reg.

Ref.: Circular No. 210/04/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 04/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 210/4/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

****

North Block, New Delhi

Dated the 26th June, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/

/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

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Madam/Sir,

Subject: Clarification on valuation of supply of import of services by a related person where recipient is

eligible to full input tax credit–Reg.

As per S. No. 4 of Schedule I of the Central Goods and Services Tax Act, 2017 (hereinafter referred to

as the ‗CGST Act‘), import of services by a person from a related person or from any of his other

establishments outside India, in the course or furtherance of business, is to be treated as supply even if

made without consideration.

2. Representations have been received from trade and industry stating that demands are being raised

by some of the field formations against the registered persons seeking tax on reverse charge basis in

respect of certain activities undertaken by their related persons based outside India, by considering the

said activities as import of services by the registered person in India, based on an expansive

interpretation of the deeming fiction in S. No. 4 of Schedule I of CGST Act, though no consideration is

involved in the said activities and the same are not considered as supplies by the said related person in

India. It has been represented that the same treatment, which is being given to domestic related parties/

distinct persons as per clarification provided by Circular No. 199/11/2023-GST dated 17-07-2023, may

also be provided in cases where a foreign entity is providing service to its related party located in India,

in cases where full ITC is available to the said recipient located in India.

3.1 In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law

across the field formations, the Board, in exercise of its powers conferred by Section 168 (1) of the CGST

Act, hereby clarifies the issues as under:

3.2 Rule 28 of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the ‗CGST Rules‘)

is reproduced as below:

―Rule 28.Value of supply of goods or services or both between distinct or related persons, other than

through an agent.—

(1) The value of the supply of goods or services or both between distinct persons as specified in sub-

section (4) and (5) of section 25 or where the supplier and recipient are related, other than where the

supply is made through an agent, shall–

(a) be the open market value of such supply;

(b) if the open market value is not available, be the value of supply of goods or services of like kind

and quality;

(c) if the value is not determinable under clause (a) or (b), be the value as determined by the

application of rule 30 or rule 31, in that order:

Provided that where the goods are intended for further supply as such by the recipient, the value

shall, at the option of the supplier, be an amount equivalent to ninety percent of the price charged

for the supply of goods of like kind and quality by the recipient to his customer not being a related

person:

Provided further that where the recipient is eligible for full input tax credit, the value declared in

the invoice shall be deemed to be the open market value of the goods or services.

…‖

3.3 As per second proviso to Rule 28(1) of CGST Rules, in cases involving supply of goods or services

or both between the distinct or related persons where the recipient is eligible for full input tax credit, the

value declared in the invoice shall be deemed to be the open market value of the said goods or services.

3.4 It may be noted that vide Circular No. 199/11/2023-GST dated 17-07-2023, clarification has been

issued regarding taxability of services provided by an office of an organisation in one State to the office of

that organisation in another State, both being distinct persons. It has been clarified in the said circular

that as per the second proviso to Rule 28(1) of CGST Rules, in respect of supply of services by Head

Office (HO) to Branch Offices (BO) of an organisation, the value of the said supply of services declared in

the invoice by HO shall be deemed to be open market value of such services, if the recipient BO is

eligible for full input tax credit. It has also been clarified vide the said circular that in cases where full

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input tax credit is available to the recipient, if HO has not issued a tax invoice to the BO in respect of any

particular services being rendered by HO to the said BO, the value of such services may be deemed to be

declared as Nil by HO to BO, and may be deemed as open market value in terms of second proviso to rule

28(1) of CGST Rules.

3.5 The second proviso to Rule 28 (1) of CGST Rules, is applicable in all the cases involving supply of

goods or services or both between the distinct persons as well as the related persons, in cases where full

ITC is available to the recipient. Accordingly, it is evident that the clarification which has been issued

vide Circular No. 199/11/2023-GST dated 17-07-2023 in respect of supplies of services between distinct

persons in cases where full ITC is available to the recipient, is equally applicable in respect of import of

services between related persons.

3.6 In case of import of services by a registered person in India from a related person located outside

India, the tax is required to be paid by the registered person in India under reverse charge mechanism.

In such cases, the registered person in India is required to issue self-invoice under Section 31(3)(f) of

CGST Act and pay tax on reverse charge basis.

3.7 In view of the above, it is clarified that in cases where the foreign affiliate is providing certain

services to the related domestic entity, and where full input tax credit is available to the said related

domestic entity, the value of such supply of services declared in the invoice by the said related domestic

entity may be deemed as open market value in terms of second proviso to rule 28(1) of CGST Rules.

Further, in cases where full input tax credit is available to the recipient, if the invoice is not issued by the

related domestic entity with respect to any service provided by the foreign affiliate to it, the value of

such services may be deemed to be declared as Nil, and may be deemed as open market value in terms

of second proviso to rule 28(1) of CGST Rules.

4. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

5. Difficulty, if any, in the implementation of the above instructions may please be brought to the

notice of the Board. Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1612

Subject: Clarification on time limit under Section 16(4) of CGST Act, 2017 in respect of RCM supplies

received from unregistered persons–reg.

Ref.: Circular No. 211/05/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 05/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

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ANNEXURE

Circular No. 211/5/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

****

North Block, New Delhi

Dated the 26th June, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/

/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

Madam/Sir,

Subject: Clarification on time limit under Section 16(4) of CGST Act, 2017 in respect of RCM supplies

received from unregistered persons–reg.

Representations have been received from trade and industry seeking clarity on the applicability of

time limit specified under section 16(4) of Central Goods & Services Tax Act, 2017 (hereinafter referred to

as the ―CGST Act‖) for the purpose of availment of input tax credit (ITC) by the recipient on the tax paid

by him under Reverse Charge Mechanism (RCM) in respect of supplies received from unregistered

persons. It has been represented that in some cases, where tax is payable on reverse charge basis by the

recipient, such as, where an activity is performed by the overseas related person for the entity located in

India and no consideration is involved, such an activity may not be considered as supply of services by

the concerned recipient in India and accordingly, no invoice is issued as well as no tax is paid by the

said recipient under RCM in respect of the same. However, later on, either on their own on the basis of

some clarification issued by the department or on the basis of some court judgement or on being pointed

out by the tax authorities during scrutiny or audit or otherwise, the said recipient issues the invoice and

pays the tax under RCM, along with interest, and claims input tax credit on such tax paid.

1.2 It has been represented that some of the field formations are taking the view that in such cases,

the relevant year of the invoice for the purpose of Section 16(4) of CGST Act is the year in which the said

supply was received and accordingly, the time limit for availment of ITC under Section 16(4) of CGST Act

is only upto the September/November of the following financial year, i.e. the financial year following the

financial year in which the said services was received. On the other hand, industry has represented that

as the invoice in respect of such supplies received from unregistered supplier, where tax has to be paid

by the recipient on RCM basis, is to be issued by the recipient as per Section 31(3)(f) of CGST Act, the

relevant year of invoice for the purpose of Section 16(4) of CGST Act is the financial year in which such

invoice has been issued and accordingly, ITC should be available on the said invoice under Section 16(4)

of CGST Act till the September/November of the financial year following the financial year in which such

invoice has been issued. Request has been made to issue clarification in the matter to avoid litigation.

2. The matter has been examined. In order to ensure uniformity in the implementation of the

provisions of the law across the field formations, the Board, in exercise of its powers conferred under

section 168(1) of the CGST Act, hereby clarifies the issue as follows.

2.1 As per Section 16(2)(a) of CGST Act, no registered person shall be entitled to the credit of any

input tax in respect of any supply of goods or services or both to him unless he is in possession of a tax

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invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents

as may be prescribed.

2.2 Rule 36(1)(b) of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the CGST

Rules) prescribes that input tax credit shall be availed by a registered person inter alia on the basis of an

invoice issued in accordance with the provisions of Clause (f) of sub-section (3) of Section 31 of CGST

Act, subject to the payment of tax.

2.3 Further, Clause (f) of sub-section (3) of Section 31 of CGST Act provides that a registered person,

who is liable to pay tax under sub-section (3) or sub-section (4) of section 9, shall issue an invoice in

respect of goods or services or both received by him from the supplier who is not registered on the date

of receipt of goods or services or both. Accordingly, where the supplier is unregistered and recipient is

registered, and the recipient is liable to pay tax on the said supply on RCM basis, the recipient is

required to issue invoice as per Section 31(3)(f) of CGST Act and pay the tax in cash on the same under

RCM.

2.4 Section 16(4) of CGST Act, as amended vide the Finance Act, 2022, deals with time limit to avail

ITC, and is reproduced below-

―A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note

for supply of goods or services or both after the thirtieth day of November following the end of financial

year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is

earlier.‖

Section 16(4) of CGST Act, before the said amendment vide the Finance Act, 2022, provided as follows:

―A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note

for supply of goods or services or both after the due date of furnishing of the return under section 39 for the

month of September following the end of financial year to which such invoice or debit note pertains or

furnishing of the relevant annual return, whichever is earlier.‖

2.5 It can be seen that section 16(4) of CGST Act links the time limit for ITC availment with the

financial year to which the invoice or debit note pertains. As discussed in Para 2.3 above, in case of

supplies where the supplier is unregistered and recipient is registered and the tax has to be paid by the

recipient on RCM basis, the recipientis required to issue invoice in terms of the provisions of Section

31(3)(f) of CGST Act and pay the tax on the same in cash under RCM. Further, as discussed in Para 2.1

above, ITC cannot be availed by a registered person in respect of any supply of goods or services or both

received by him, as per the provisions of Section 16(2)(a) of CGST Act, unless he is in possession of a tax

invoice or debit note or such other tax paying documents as may be prescribed.

2.6 A combined reading of the above provisions leads to a conclusion that as ITC can be availed by the

recipient only on the basis of invoice or debit note or other duty paying document, and as in case of RCM

supplies received by the recipient from unregistered supplier, invoice has to be issued by the recipient

himself, the relevant financial year, to which invoice pertains, for the purpose of time limit for availment

of ITC under Section 16(4) of CGST Act in such cases shall be the financial year of issuance of such

invoice only. In cases, where the recipient issues the said invoice after the time of supply of the said

supply and pays tax accordingly, he will be required to pay interest on such delayed payment of tax.

2.7 Accordingly, it is clarified that in cases of supplies received from unregistered suppliers, where tax

has to be paid by the recipient under Reverse Charge Mechanism (RCM) and where invoice is to be

issued by the recipient of the supplies in accordance with Section 31(3)(f) of CGST Act, the relevant

financial year for calculation of time limit for availment of input tax credit under the provisions of Section

16(4) of CGST Act will be the financial year in which the invoice has been issued by the recipient under

Section 31(3)(f) of CGST Act, subject to payment of tax on the said supply by the recipient and fulfilment

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of other conditions and restrictions of section 16 and 17 of CGST Act. In case, the recipient issues the

invoice after the time of supply of the said supply and pays tax accordingly, he will be required to pay

interest on such delayed payment of tax. Further, in cases of such delayed issuance of invoice by the

recipient, he may also be liable to penal action under the provisions of Section 122 of CGST Act.

3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

4. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

Board. Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1613

Subject: Clarification on mechanism for providing evidence of compliance of conditions of Section

15(3)(b)(ii) of the CGST Act, 2017 by the suppliers–reg.

Ref.: Circular No. 212/06/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 06/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 212/6/2024-GST

F.No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

(Department of Revenue)

Central Board of Indirect Taxes and Customs

GST Policy Wing

*****

North Block, New Delhi

Dated the 26^th June, 2024

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To,

The Principal Chief Commissioners/Chief Commissioners/Principal

Commissioners/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

Madam/Sir,

Subject: Mechanism for providing evidence of compliance of conditions of Section 15(3)(b)(ii) of the

CGST Act, 2017 by the suppliers–reg.

In cases where the discounts are offered by the suppliers through tax credit notes, after the supply

has been effected, the said discount is not to be included in the taxable value only if the condition of

clause (b)(ii) of sub-section (3) of section 15 of the Central Goods and Services Tax Act, 2017 (hereinafter

referred to as ―CGST Act‖), for reversal of the input tax credit attributable to the said discount by the

recipient, is satisfied. Representations have been received from the trade and the field formations

mentioning that there is presently no facility available to the supplier as well as the tax officers on the

common portal to verify whether the input tax credit attributable to the said discount has been reversed

by the recipient or not. Request has been made to provide a suitable mechanism for enabling the

suppliers as well as tax officers to verify fulfilment of the condition of section 15(3)(b)(ii) of the CGST Act

regarding proportionate reversal of input tax credit by the recipients in respect of such discounts given

by the supplier by issuing tax credit notes after the supply has been effected.

2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law

across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the CGST

Act, hereby clarifies the issues as under:

2.1 Section 15 of the CGST Act provides for value of taxable supply of goods or services or both.

Sub-section (3) of the said section provides that the value of supply shall not include discount given by

the supplier, subject to certain conditions. As per clause (b) of the said sub-section, any discount which

is given after the supply has been effected shall not be included in the value of the supply, only if it

satisfies the following conditions:

i. Such discount is established in terms of an agreement entered into at or before the time of such

supply;

ii. Such discount must be specifically linked to the relevant invoices

iii. Input Tax Credit attributable to such discount on the basis of document issued by the supplier

has been duly reversed by the recipient.

2.2 Accordingly, wherever any discount is offered by the supplier to the recipient, by issuance of a tax

credit note as per section 34 of the CGST Act, after the supply has been effected, the said discount can

be excluded from the value of taxable supply only if the conditions of clause (b) of sub-section (3) of

section 15 of the CGST Act are fulfilled. Such conditions interalia includes the requirement of reversal of

input tax credit by the recipient attributable to the said discount.

2.3 However, there is no system functionality/facility presently available on the common portal to

enable the supplier or the tax officer to verify the compliance of the said condition of proportionate

reversal of input tax credit by the recipient.

2.4 In view of the above, till the time a functionality/facility is made available on the common portal

to enable the suppliers as well as the tax officers to verify whether the input tax credit attributable to

such discounts offered through tax credit notes has been reversed by the recipient or not, the supplier

may procure a certificate from the recipient of supply, issued by the Chartered Accountant (CA) or the

Cost Accountant (CMA), certifying that the recipient has made the required proportionate reversal of

input tax credit at his end in respect of such credit note issued by the supplier.

2.5 The said CA/CMA certificate may include details such as the details of the credit notes, the details

of the relevant invoice number against which the said credit note has been issued, the amount of ITC

reversal in respect of each of the said credit notes along with the details of the FORM GST DRC-03/

return /any other relevant document through which such reversal of ITC has been made by the recipient.

2.6 Such certificate issued by CA or CMA shall contain UDIN (Unique Document Identification

Number).

UDIN

the

certificate

issued

CAs

can

verified

from

ICAI

website

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https://udin.icai.org/search-udin and that issued by CMAs can be verified from ICMAI website

https://eicmai.in/udin/VerifyUDIN.aspx.

2.7 In cases, where the amount of tax (CGST+SGST+IGST and including compensation cess, if any)

involved in the discount given by the supplier to a recipient through tax credit notes in a Financial Year

is not exceeding Rs 5,00,000 (rupees five lakhs only), then instead of CA/CMA certificate, the said

supplier may procure an undertaking/certificate from the said recipient that the said input tax credit

attributable to such discount has been reversed by him, along with the details mentioned in Para 2.5

above.

2.8 Such certificates issued by the CA/CMA or the undertakings/certificates issued by the recipient of

supply, as the case may be, shall be treated as a suitable and admissible evidence for the purpose of

section 15(3)(b)(ii) of the CGST Act, 2017. The supplier shall produce such certificates/undertakings

before the tax officers, if required, during any proceedings such as scrutiny, audit, investigations, etc.

Even for the past period, whereever any such evidence as per Section 15(3)(b)(ii) of CGST Act in respect

of credit note issued by the supplier for post-sale discounts is required to be produced by him to the tax

authorities, the concerned taxpayer may procure and provide such certificates issued by CA/CMA or the

undertakings certificates issued by the recipients of supply, as the case may be, to the concerned

investigating/audit/adjudicating authority as evidence of requisite reversal of input tax credit by his

recipients.

3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

4. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board.

Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

CCT/26-4/2024-25/G/1614

Subject: Clarification on the taxability of ESOP/ESPP/RSU provided by a company to its employees

through its overseas holding company–reg.

Ref.: Circular No. 213/07/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 07/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

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ANNEXURE

Circular No. 213/07/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

(Department of Revenue)

Central Board of Indirect Taxes and Customs

GST Policy Wing

*****

North Delhi, New Delhi

Dated the 26thJune, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/

/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

Madam/Sir,

Subject: Clarification on the taxability of ESOP/ESPP/RSU provided by a company to its employees

through its overseas holding company–reg.

Representations have been received from the trade and field formations seeking clarification

regarding the taxability of Employee Stock Option (ESOP)/Employee Stock Purchase Plan (ESPP)/

Restricted Stock Unit (RSU) provided by a company to its employees.

2.1 It has been represented that some of the Indian companies provide the option to their employees

for allotment of securities/shares of their foreign holding company as part of the compensation package

as per terms of contract of employment. In such cases, on exercising the option by the employees of

Indian subsidiary company, the securities/shares of foreign holding company are allotted directly by the

holding company to the concerned employees of Indian subsidiary company, and the cost of such

securities/shares is generally reimbursed by the subsidiary company to the holding company.

2.2 Doubts are being raised regarding taxability of such a transaction under GST, i.e. whether such

transfer of shares/securities by the foreign holding company directly to the employees of the Indian

subsidiary company and subsequent re-imbursement of the cost of such shares/securities by the Indian

subsidiary company to the foreign holding company can be considered as import of financial services by

the Indian subsidiary company from the foreign holding company and whether the same can be

considered as liable to GST in the hands of Indian subsidiary company on reverse charge basis.

3. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law

across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central

Goods and Services Tax Act, 2017 (hereinafter referred to as ―CGST Act‖), hereby clarifies the issues as

under.

4. The companies are providing option of allotment of securities/shares to their employees as a means

of incentivization and the same is commonly referred to as an Employee Stock Purchase Plan (ESPP) or

Employee Stock Option Plan (ESOP) or Restricted Stock Unit (RSU). Such specific terminology usage

depends on the agreed-upon compensation terms between the employer and the employee. ESPPs and

ESOPs are typically presented as 'options' granted to employees, whereas RSUs take the form of awards

or rewards contingent upon the employee meeting specific performance standards. Regardless of the

terminology used, the fundamental essence of the transaction remains the same i.e. the allocation of

securities or shares from the employer to employee as part of compensation package with the aim of

motivating enhanced performance.

4.1 A transaction involving transfer of ESOP/ESPP/RSU to the employees of domestic subsidiary by the

foreign holding company appears to involve the following steps:



The domestic subsidiary company gives option/facility of ESOP/ESPP/RSU to its employees as

part of compensation package as per terms of employment.

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

The employees exercise their stock options, either by purchasing shares at the grant price or by

holding the options until they vest.



The foreign holding company of the domestic subsidiary company issues ESOP/ESPP/RSU, which

are securities/shares listed on the foreign stock exchange, to the employees of the domestic

subsidiary company.



The foreign holding company transfers the shares directly to the employees of the subsidiary

company.



The domestic subsidiary company generally reimburses the cost of such shares to the foreign

holding company on cost-to cost basis either through an actual remittance or through an equity

transfer as prescribed by the relevant Indian Accounting Standard.



The employees hold the shares and may sell them at a later date, if they so choose.

4.2 The foreign holding company issues securities/shares as ESOP/SPP/RSU to the employees of the

domestic subsidiary company on the request of the said domestic subsidiary company. However,

Securities under GST Law are considered neither goods nor services in terms of definition of ―goods‖

under clause (52) of section 2 of CGST Act and in terms of definition of ―services‖ under clause (102) of

the said section. Further, securities include ‗shares‘ as per definition of ―securities‖ under clause (h) of

section 2 of Securities Contracts (Regulation) Act, 1956. Accordingly, purchase or sale of

securities/shares, in itself, is neither a supply of goods nor a supply of services. Therefore, in the absence

of such transaction, falling under the supply of ‗goods‘ or ‗services‘ as per GST Act, GST is not leviable on

said transaction of sale/purchase/transfer of securities/shares.

4.3 Further, the companies offer ESOP/ESPP/RSU to their employees to motivate them to perform

better, and to retain the employees, by aligning the interest of employees with that of company. The

ESOP/ESPP/RSU is a part of remuneration of the employee by the employer as per terms of employment.

As per Entry 1 of Schedule III of the CGST Act, the services by an employee to the employer in the course

of or in relation to his employment are treated neither as supply of goods nor as supply of services.

Therefore, GST is not leviable on the compensation paid to the employee by the employer as per the

terms of employment contract which involve transfer of securities/shares of the foreign holding company

to the employees of domestic subsidiary company.

4.4 The foreign holding company directly transfers the shares/securities to the employees of the

domestic subsidiary company on the request of the said domestic subsidiary company. Reimbursement

of such securities/shares is generally done by domestic subsidiary company to foreign holding company

on cost-to-cost basis i.e. equal to the market value of securities without any element of additional fee,

markup or commission. Since the said reimbursement by the domestic subsidiary company to the foreign

holding company is for transfer of securities/shares, which is neither in nature of goods nor services, the

same cannot be treated as import of services by the domestic subsidiary company from the foreign

holding company and hence, is not liable to GST under CGST Act.

4.5 However, if the foreign holding company charges any additional fee, markup, or commission from

the domestic subsidiary company for issuing ESOP/ESPP/RSU to the employees of the domestic

subsidiary company, then the same shall be considered to be in nature of consideration for the supply of

services of facilitating/arranging the transaction in securities/shares by the foreign holding company to

the domestic subsidiary company. In this case, GST will be leviable on such amount of the additional fee,

markup, or commission, charged by the foreign holding company from the domestic subsidiary for

issuance of its securities/shares to the employees of the latter. The GST shall be payable by the domestic

holding company on reverse charge basis on such import of services from the foreign holding company.

4.6 Accordingly, it is clarified that no supply of service appears to be taking place between the foreign

holding company and the domestic subsidiary company where the foreign holding company issues

ESOP/ESPP/RSU to the employees of domestic subsidiary company, and the domestic subsidiary

company reimburses the cost of such securities/shares to the foreign holding company on cost-to-cost

basis. However, in cases where an additional amount over and above the cost of securities/shares is

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charged by the foreign holding company from the domestic subsidiary company, by whatever name

called, GST would be leviable on such additional amount charged as consideration for the supply of

services of facilitating/arranging the transaction in securities/shares by the foreign holding company to

the domestic subsidiary company. The GST shall be payable by the domestic subsidiary company on

reverse charge basis in such a case on the said import of services.

5. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

6. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

Board. Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1615

Subject: Clarification on the requirement of reversal of input tax credit in respect of the portion of the

premium for life insurance policies which is not included in taxable value–reg.

Ref.: Circular No. 214/08/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 08/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 214/8/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

(Department of Revenue)

Central Board of Indirect Taxes and Customs

GST Policy Wing

*****

North Block, New Delhi

Dated the 26th June, 2024

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To,

The Principal Chief Commissioners/Chief Commissioners/

Principal Commissioners/Commissioners of Central Tax (All)

The Principal Directors General/ Directors General (All)

Madam/Sir,

Subject: Clarification on the requirement of reversal of input tax credit in respect of the portion of the

premium for life insurance policies which is not included in taxable value-reg.

Representations have been received from the trade and field formations seeking clarification on the

issue as to whether the amount of insurance premium, which is not included in the taxable value as per

Rule 32(4) of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the ―CGST Rules‖)

applicable for life insurance business, will be treated as pertaining to an exempt supply/non-taxable

supply and whether the input tax credit availed in respect of such amount shall be required to be

reversed or not.

2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of

law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the

Central Goods and Services Tax Act, 2017 (hereinafter referred to as the ―CGST Act‖), hereby clarifies

the issues as under:

No.

Issue

Clarification

Whether

the

amount

insurance premium, which is

not included in the taxable

value as per Rule 32(4) of CGST

Rules

applicable

for

life

insurance business, shall be

treated as pertaining to a non-

taxable supply/exempt supply

for the purpose of reversal of

Input tax credit as per section

17(1) of CGST Act read with

Rule 42 & 43 of CGST Rules.

‗Life insurance business‘ has been defined in Section 2(11) of

the Insurance Act, 1938 as below:

―2(11) life insurance business means the business of

effecting contracts of insurance upon human life, including any

contract whereby the payment of money is assured on death

(except death by accident only) or the happening of any

contingency dependent on human life, and any contract which

is subject to payment of premiums for a term dependent on

human life and shall be deemed to include–

(a) the granting of disability and double or triple indemnity

accident benefits, if so provided in the contract of insurance,

(b) the granting of annuities upon human life; and

(c) the granting of superannuation allowances and benefit

payable out of any fund applicable solely to the relief and

maintenance of persons engaged or who have been engaged in

any particular profession, trade or employment or of the

dependents of such persons;

Explanation.— For the removal of doubts, it is hereby declared

that life insurance business shall include any unit linked

insurance policy or scrips or any such instrument or unit, by

whatever name called, which provides a component of

investment and a component of insurance issued by an insurer

referred to in clause (9) of this section.

2. Life insurance companies are providing service of

insuring the life of the insured and in return, are charging

consideration in the form of premium from the insured. A

number of life insurance companies are providing policies

which may consist of a component of investment in addition

to the component for the risk cover of the life insurance and

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accordingly, in such cases, the premium charged also includes

the component which is allocated for investment or saving on

behalf of the policy holder. As per definition of ‗Life insurance

business‘ provided in Section 2(11) of the Insurance Act, 1938,

life insurance business includes any unit linked insurance

policy or scrips or any such instrument or unit, by whatever

name called, which provides a component of investment and a

component of insurance issued by an insurer. Accordingly,

such life insurance policies, which also include a component

of investment along with the component of risk cover for life

insurance, are also covered under life insurance business.

2.1 It is mentioned that value of supply of services in

relation to life insurance business is to be determined as per

provisions of sub-rule (4) of rule 32 of CGST Rules. The said

sub-rule provides that the value of supply of services in

respect of life insurance business is primarily to be

determined by deducting the amount of premium allocated for

investment/savings on behalf of the policy holder from the

gross premium charged from the policy holder. The said

sub-rule also provides for determination of value of supply of

such services based on certain percentage of the gross

premium in other situations. However, where the entire

premium is only towards the risk cover in life insurance, the

value of supply is not required to be determined under the

said sub-rule as in such cases whole of the consideration i.e.

gross premium is towards life insurance services.

2.2 As per section 2(47) of the CGST Act, exempt supply

means supply of any goods or services or both which attracts

nil rate of tax or which may be wholly exempt from tax under

section 11, or under section 6 of the Integrated Goods and

Services Tax Act, 2017 (hereinafter referred to as the ―IGST

Act‖), and includes non-taxable supply. The said definition of

exempt supply has the following three limbs:—

(a) Supply of service which is nil rated;

(b) Supply of service which is wholly exempted from tax under

section 11 of CGST Act or under Section 6 of IGST Act; or

2.2.1. Further, as per section 2(78) of CGST Act, non-taxable

supply means a supply of goods or services or both which is

not leviable to tax under the CGST Act or under the IGST Act.

2.2.2 It is mentioned that there is no doubt about taxability of

supply of service of providing life insurance services by the

insurance company to the insured/policy holder but the only

issue is regarding the treatment of the amount of premium

which is not included in the taxable value of supply, as

determined under the provisions of Rule 32(4) of CGST Rules.

The service of providing life insurance cover is neither nil

rated, nor there is any notification issued under section 11 of

CGST Act by virtue of which the said service or any portion of

the said service has been exempted from GST.

2.2.3 It is also mentioned that the supply can be considered

as a non-taxable supply only when it is not leviable to tax

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under the CGST Act or under the IGST Act. It is not a case

where the tax is not leviable on the supply of life insurance

services provided by life insurance companies to the

insured/policy holder. The value of the said supply of service

in respect of life insurance business as determined under

Rule 32(4) of CGST Rules, 2017 may not include some portion

of gross premium as per methodology provided in the said

rule. This portion of premium which is not includible in

taxable value as per provisions of Rule 32(4) of CGST Rules is

neither nil rated, nor wholly exempted from tax under section

11 of CGST Act and also not a non-taxable supply. Therefore,

just because some amount of consideration is not included in

value of taxable supply as per the provisions of the statute, it

cannot be said that the said portion of consideration becomes

attributable to a non-taxable or exempt supply.

2.2.4 Further, Rule 42 of the CGST Rules provides for reversal

of input tax credit in certain scenarios. As per the said rule,

only that input tax credit which attract the provisions of

sub-section (1) and sub-section (2) of Section 17 of the CGST

Act needs to be determined and reversed thereof. Further,

sub-section (1) and sub-section (2) of Section 17 of the CGST

Act restrict the amount of credit only in a case where the

registered person uses the goods or services partly for

business or other purposes or partly for making taxable

supplies or exempt supplies. However, as discussed in Para

2.2.3 above, the portion of premium, which is not includible in

taxable value of supply as per Rule 32(4) of CGST Rules,

cannot be considered as pertaining to an exempt supply.

3. In view of this, it is clarified that the amount of the premium

for taxable life insurance policies, which is not included in the

taxable value as determined under rule 32(4) of CGST Rules,

cannot be considered as pertaining to a non-taxable or exempt

supply and therefore, there is no requirement of reversal of

input tax credit as per provisions of Rule 42 or rule 43 of CGST

Rules, read with sub-section (1) and sub-section (2) of Section

17 of CGST Act, in respect of the said amount.

3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

4. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

Board. Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1616

Subject: Clarification on taxability of salvage/wreck value earmarked in the claim assessment of the

damage caused to the motor vehicle-reg.

Ref.:

Circular No. 215/09/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

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Circular

(No. 09/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 215/9/2024-GST

F.No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

(Department of Revenue)

Central Board of Indirect Taxes and Customs

GST Policy Wing

*****

North Block, New Delhi

Dated the 26th June, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/

/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

Madam/Sir,

Subject: Clarification on taxability of salvage/wreck value earmarked in the claim assessment of the

damage caused to the motor vehicle -reg.

The insurance companies, which are engaged in providing general insurance services in respect of

insurance of motor vehicles, insure the cost of repairs/damages of motor vehicles incurred by the

policyholders. Such damages to the insured vehicle are classified in two categories:

i. Total Loss/Constructive Total Loss or Cash Loss; and

ii. Partial Loss Situation

1.1 Representations have been received from the trade and field formations seeking clarification as to

whether in case of motor vehicle insurance, GST is payable by the insurance company on

salvage/wreckage value earmarked in the claim assessment of the damage caused to the motor vehicle.

2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law

across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central

Goods and Services Tax Act, 2017 (hereinafter referred to as ―CGST Act‖), hereby clarifies the issues as

under:

S. No.

Issue

Clarification

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Whether the insurance

company is liable to

pay

GST

the

salvage/wreckage

value earmarked in the

claim assessment of

the damage caused to

the motor vehicle?

Under GST law, supply is the relevant taxable event for levying tax.

For an activity/transaction to be liable to GST, existence of ‗supply‘

as defined under section 7 of CGST Act should be there.

2.1 Section 7 of CGST Act defines supply to mean ‗all forms of supply

of goods or services or both made or agreed to be made for a

consideration by a person in the course or furtherance of business.‘

In the instant case, insurance companies are providing service of

insuring the vehicle/automobile for any damages and in return,

charging consideration in the form of premium charged from the

owner of the vehicle. It is also noted that in respect of insurance

services being provided by the insurance companies, it is the

responsibility of the insurance company to get the damaged vehicle

repaired or to compensate the insured person against the damage

caused to the vehicle, to the extent covered under the terms of the

insurance.

2.2 Any Deduction made by the insurance company from the final

claim amount paid to the insured is in the form of deductibles which

is pre-decided and mutually agreed by the insured and the insurer

while signing the insurance contract. In cases where as per the

policy contract, the insurance company‘s liability to pay the insured

is limited to Insured‘s Declared Value (IDV) of the vehicle less the

value of salvage/wreck in cases of total loss to the vehicle, if the

insurance claim is settled by the insurance company as per the

terms

the

insurance

contract

deducting

value

salvage/wreckage

from

the

claim

settlement

amount,

the

salvage/wreckage does not become property of insurance company,

and the ownership for such wreckage/salvage remains with the

insured. However, in some cases, the insurance company may

support sourcing of competitive quotes from various salvage/

/wreckage buyers and the insured may select the best available

offer for sale of wreckage or damaged car. The insured may also

source quotes from open markets and dispose the wreckage or

damaged car to such a buyer. In any case, the ownership of the

wreckage vests with the insured and not with the insurance

company. The same can be disposed by the insured either directly,

or through the garage, or may not be disposed at all, as per his wish

and choice. The deduction of the value of salvage from the

insurance settlement amount, is as per the terms of the insurance

contract, and cannot be said to be consideration for any supply

being made by insurance company. Accordingly, in such cases,

there does not appear to be any supply of salvage by insurance

company and as such, there does not appear to be any liability

under GST on the part of insurance company in respect of this

salvage value.

2.3 However, in situations where the insurance contract provides for

settlement of claim on full IDV, without deduction of value of

salvage/wreck, the insured will be paid for full claim amount

without any deductions on account of salvage value. In such a

situation, the salvage becomes the property of Insurance Company

after settling the claim for the full amount and the insurance

company is obligated to deal with the same or dispose of the same.

In such cases, the outward GST liability on disposal/sale of the

salvage is to be discharged by the insurance companies.

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3. Therefore, in cases where due to the conditions mentioned in the

contract itself, general insurance companies are deducting the

value of salvage as deductibles from the claim amount, the salvage

remains the property of insured and insurance companies are not

liable to discharge GST liability on the same. However, in cases,

where the insurance claim is settled on full claim amount, without

deduction of value of salvage/wreckage (as per the terms of the

contract), the salvage becomes the property of the insurance

company and the insurance company will be obligated to discharge

GST on supply of salvage to the salvage buyer.

3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

4. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board.

Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1617

Subject: Clarification in respect of GST liability and input tax credit (ITC) availability in cases involving

Warranty/Extended Warranty, in furtherance to Circular No. 195/07/2023-GST dated

17-07-2023–reg.

Ref.: Circular No. 216/10/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 10/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 216/10/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

*****

North Block, New Delhi

Dated the 26th June, 2024

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To,

The Principal Chief Commissioners/Chief Commissioners/

/Principal Commissioners/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

Madam/Sir,

Subject: Clarification in respect of GST liability and input tax credit (ITC) availability in cases involving

Warranty/Extended Warranty, in furtherance to Circular No. 195/07/2023-GST dated 17-07-2023–reg.

Reference is invited to Circular No. 195/07/2023-GST dated 17-07-2023 (herein after referred to as ―the

said circular‖) clarifying certain issues regarding GST liability and availability of input tax credit (ITC) in

respect of warranty replacement of parts and repair services during warranty period. Representations

have been received from trade and industry requesting for some further clarifications in related matters.

2. In order to ensure uniformity in the implementation of the provisions of law across the field

formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods &

Services Tax Act, 2017 (herein after referred to as the ―CGST Act‖), hereby clarifies the following issues

as below.

3. Clarification regarding GST liability as well as liability to reverse input tax credit in respect of cases

where goods as such or the parts are replaced under warranty:

3.1 Table in Para 2 of Circular No. 195/07/2023-GST dated 17-07-2023 clarifies regarding GST liability

as well as liability to reverse ITC, only in cases involving replacement of 'parts' and not if goods as such

are replaced under warranty. Request has been made to also issue a clarification in respect of cases

where the goods as such are replaced under warranty.

3.2 In cases where warranty is provided by the manufacturer/suppliers to the customers in respect of

any goods, and if any defect is detected in the said goods during the warranty period, the manufacturer

may be required to replace either one or more parts or the goods as such, depending upon the extent of

damage/defect noticed in the said goods. However, Table in Para 2 of the said circular only clarifies in

respect of the situations involving replacement of part/parts and does not specifically refer to the

situation involving replacement of goods as such. It is clarified that the clarification provided in Para 2 of

the said circular is also applicable in case where the goods as such are replaced under warranty.

3.3 Accordingly, wherever, ‗any part,‘ ‗parts‘ and ‗part(s)‘ has been mentioned in Para 2 of Circular No.

195/07/2023-GST dated 17-07-2023, the same may be read as ‗goods or its parts, as the case may be‘.

4. Clarification in respect of cases where the distributor replaces the parts/goods to the customer as

part of warranty out of his own stock on behalf of the manufacturer and subsequently gets replenishment

of the said parts/goods from the manufacturer:

4.1 Sr. No. 4 of Para 2 of the said Circular clarifies about the GST liability as well as liability to reverse

ITC in cases where the distributor provides replacement of parts to the customer as part of warranty on

behalf of the manufacturer. However, it does not cover the scenario where the distributor replaces the

goods to the customer as part of warranty out of his own stock on behalf of the manufacturer to provide

prompt service to the customer, and then raises a requisition to the manufacturer for the goods replaced

by him under warranty. The manufacturer, thereafter, provides the said goods to the distributor vide a

delivery challan, as replenishment for the goods provided as replacement to the customer by the

distributor. Request has been made to issue clarification in respect of such a scenario also.

4.2 In cases where the distributor replaces the parts/goods to the customer as part of warranty out of

his own stock on behalf of the manufacturer and subsequently gets replenishment of the said

parts/goods from the manufacturer, the key aspects, viz. (i) distributor providing replacement out of his

own stock; (ii) manufacturer replenishing the distributor for the said replacement; and (iii) the

replacement being made at no additional cost on the distributor,are all covered in the scenario specified

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in point (b) of Sr. No.4 of Para 2 of the said Circular. Therefore, GST liability as well as liability to reverse

ITC in cases covered by the said scenario should be similar to that in respect of the scenario covered in

point (b) of S. No. 4 of Para 2 of the above circular.

4.3 Accordingly, to specifically clarify in respect of such a scenario, in column 3 of the table in Para 2 of

the said circular, against S. No. 4, after point (c), point (d) shall be inserted as below:

―(d) There may be cases where the distributor replaces the goods or its parts to the customer under

warranty by using his stock and then raises a requisition to the manufacturer for the goods or the parts, as

the case may be. The manufacturer then provides the said goods or the parts, as the case may be, to the

distributor through a delivery challan, without separately charging any consideration at the time of such

replenishment. In such a case, no GST is payable on such replenishment of goods or the parts, as the case

may be. Further, no reversal of ITC is required to be made by the manufacturer in respect of the goods or

the parts, as the case may be, so replenished to the distributor.‖

5. (i) Nature of supply of extended warranty, at the time of original supply of goods, as a separate

supply from supply of goods, if the supply of extended warranty is made by a person different from the

supplier of the goods;

(ii) Nature of supply of extended warranty, made after original supply of goods:

5.1 It has been represented that in respect of cases, where agreement for extended warranty is made

at the time of original supply of goods, and the supplier of extended warranty is different from the

supplier of goods, the extended warranty should be treated as a separate and independent transaction

from the supply of goods, whereas Sr. No. 6 of Para 2 of the said Circular has treated it to be in the nature

of composite supplies, the principal supply being the supply of goods. Request has been made to issue a

suitable clarification in the matter.

5.1.1 There may be cases where the supplier of the goods may be the dealer while the supplier of

extended warranty may be the OEM or third party. In such cases, the supplies being made by different

suppliers cannot be treated as part of the composite supply. It is, therefore, clarified that in cases, where

agreement for extended warranty is made at the time of original supply of goods, and the supplier of

extended warranty is different from the supplier of goods, the supply of extended warranty and supply of

goods cannot be treated as the composite supply. In such cases, supply of extended warranty will be

treated as a separate supply from the original supply of goods.

5.2

It has also been represented that in cases where extended warranty is sold subsequent to the

original supply of goods, the same should be considered as supply of services only whereas the said

Circular clarifies that GST on the same would be payable depending on the nature of the contract (i.e.

whether the extended warranty is only for goods or for services or for composite supply involving goods

and services). Request has been made to issue a revised clarification in respect of the same.

5.2.1 Supply of extended warranty is an assurance to the customers by the manufacturer/third party

that the goods will operate free of defects during the extended warranty coverage period, and in case of

any defect attributable to faulty material or workmanship at the time of manufacture, the same will be

repaired/replaced by the said manufacturer/third party. Further, whether the goods will later on require

replacement of parts or just repair service or neither during the said extended warranty period, is also

not known at the time of sale/supply of extended warranty. Thus, extended warranty is in the nature of

conveying of an ―assurance‖ and not an actual replacement of part or repairs.

5.3 Accordingly, it is clarified that in cases, where supply of extended warranty is made subsequent to

the original supply of goods, or where supply of extended warranty is to be treated as a separate supply

from the original supply of goods in cases referred in Para 5.1.1 above, the supply of extended warranty

shall be treated as a supply of services distinct from the original supply of goods, and the supplier of the

said extended warranty shall be liable to discharge GST liability applicable on such supply of services.

5.4 Accordingly, in Sr. No. 6 of Table in para 2 of the said Circular, in column No. 3 of the table, the

following shall be substituted:

―(a) If a customer enters into an agreement of extended warranty with the supplier of the goods at the

time of original supply, then the consideration for such extended warranty becomes part of the value of the

composite supply, the principal supply being the supply of goods, and GST would be payable accordingly.

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However, if the supply of extended warranty is made by a person different from the supplier of the goods,

then supply of extended warranty will be treated as a separate supply from the original supply of goods

and will be taxable as supply of services.

(b) In case where a consumer enters into an agreement of extended warranty at any time after the

original supply, then the same shall be treated as a supply of services distinct from the original supply of

goods and the supplier of the said extended warranty shall be liable to discharge GST liability applicable

on such supply of services.‖

6. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

7. Difficulty, if any, in the implementation of this Circular may be brought to the notice of the

Board. Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1618

Subject: Entitlement of ITC by the insurance companies on the expenses incurred for repair of motor

vehicles in case of reimbursement mode of insurance claim settlement–reg.

Ref.: Circular No. 217/11/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 11/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 217/11/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

*****

North Block, New Delhi

Dated the 26th June, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/

/Principal Commissioners/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

OFFICIAL GAZETTE — GOVT. OF GOA

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384

Madam/Sir,

Subject: Entitlement of ITC by the insurance companies on the expenses incurred for repair of motor

vehicles in case of reimbursement mode of insurance claim settlement-reg.

The insurance companies, which are engaged in providing general insurance services in respect of

insurance of motor vehicles, insure the cost of repairs/damages of motor vehicles incurred by the policy

holders and settle the claims in two modes i.e., Cashless or Reimbursement.

1.2 Under both modes of settlement, the insurance company accounts for repair liability (as assessed

by the Surveyor/Loss Assessor) as claim cost and is liable to make payment of approved repair charges

to the garage. In both the cases, the invoices are generally issued by the garages in the name of

Insurance companies. While in case of Cashless Mode, the insurance companies directly make the

payment of approved repair charge to the Network Garage, in case of Reimbursement mode, the

payment is first made by the Insured to the Non-Network Garage, which is subsequently reimbursed by

the insurance company to the Insured, to the extent of approved repair/claim cost. Accordingly, the

insurance companies may be availing input tax credit (ITC) on the tax paid in respect of such repair

services provided by the garages in Cashless Mode of claim settlement as well as in Reimbursement

Mode of claim settlement on the basis of the invoices issued by the garages in their name.

1.3 It has been represented by the insurance companies that in case of reimbursement mode of claim

settlement, some field formations are raising objections on availment of ITC by insurance companies in

respect of repair invoices issued by the non-network garages on insurance companies. It is being

claimed by the said field formations that in case of reimbursement mode of claim settlement, there is no

credit facility offered by the garages to the Insurance Companies and therefore, the supply of repair

service is made by the garage to the insured and not to the insurer. Accordingly, it is being claimed that

ITC of repair invoices, in such cases, should not be available to the insurance companies.

1.4 Request has been received seeking clarity on availability of ITC in respect of repair expenses

incurred in case of reimbursement mode of claim settlement.

2. In order to ensure uniformity in the implementation of the provisions of the law across field

formations, the Board, in exercise of its powers conferred by section 168(1) of the Central Goods and

Services Tax Act, 2017 (hereinafter referred to as the ―CGST Act‖), hereby clarifies the following:

S. No.

Issue

Clarification

The insurance companies, which are

engaged

providing

general

insurance services in respect of

insurance of motor vehicles, insure

the cost of repairs/damages of motor

vehicles incurred by the policy

holders and settle the claims in two

modes

i.e.,

Cashless

Reimbursement. Whether ITC is

available to insurance companies in

respect

repair

expenses

reimbursed

the

insurance

company in case of reimbursement

mode of claim settlement.

Under reimbursement mode of claim settlement, the

insured avails repair services from non-network

garages with which the insurance companies do not

have routine business relationship. The said garages

issue the invoice in the name of the insurance company

while not extending credit facility for the repair costs.

Accordingly, the policy holder/insured makes payment

of such repair services, and subsequently, the

insurance company reimburses the approved claim cost

to the insured.

Section 17(5) of the CGST Act provides that ITC in

respect of services of repair of motor vehicles shall be

available where received by a taxable person engaged

in the supply of general insurance services in respect of

motor vehicles insured by him.

Section 16 of CGST Act provides that every registered

person shall, subject to such conditions and restrictions

as may be prescribed and in the manner specified in

section 49 of the said Act, be entitled to take credit of

input tax charged on any supply of goods or services or

both to him which are used or intended to be used in

the course or furtherance of his business and the said

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amount shall be credited to the electronic credit ledger

of such person.

Further, Section 2(93) of CGST Act defines ―recipient‖

of supply of goods or services or both, as the person

who is liable to pay the consideration, where such

consideration is payable for the said supply of goods or

services or both.

Moreover,

per

Section

2(31)

CGST

Act,

―consideration‖ includes any payment made or to be

made in relation to supply of the goods or services or

both, whether by the recipient or by any other person.

In reimbursement mode of claim settlement, the

payment is made by the insurance company for the

approved

cost

repair

services

through

reimbursement to the insured. Further, irrespective of

the fact that the payment of the repair services to the

garage is first made by the insured, which is then

reimbursed by the insurance company to the insured to

the extent of the approved claim cost, the liability to

pay for the repair service for the approved claim cost

lies with the insurance company, and thus, the

insurance company is covered in the definition of

―recipient‖ in respect of the said supply of services of

vehicle repair provided by the garage under Section

2(93) of CGST Act, to the extent of approved repair

liability. Moreover, availment of credit in respect of

input tax paid on motor vehicle repair services received

by the insurance company for outward supply of

insurance services for such motor vehicles is not barred

under Section 17(5) of CGST Act.

Accordingly, it is clarified that ITC is available to

Insurance Companies in respect of motor vehicle repair

expenses incurred by them in case of reimbursement

mode of claim settlement.

Where the invoice raised by the

garage also includes an amount in

excess of the approved claim cost,

the

insurance

company

only

reimburses the approved claim cost

to the garage after considering the

standard

deductions

viz.

the

compulsory deductibles to be borne

the

insured,

depreciation,

improvements outside the coverage,

value of salvage of the damaged

parts of the motor vehicles, etc. The

remaining amount is to be paid by

the insured to the garage.

What is the extent of ITC available

to the insurer in such cases?

In cases where the garage issues two separate invoices

in respect of the repair services, one to the insurance

company in respect of approved claim cost and second

to the customer for the amount of repair service in

excess of the approved claim cost, input tax credit may

be available to the insurance company on the said

invoice issued to the insurance company subject to

reimbursement of said amount by insurance company

to the customer.

However, if the invoice for full amount for repair

services is issued to the insurance company while the

insurance company makes reimbursement to the

insured only for the approved claim cost, then, the

input tax credit may be available to the insurance

company only to the extent of reimbursement of the

approved claim cost to the insured, and not on the full

invoice value.

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Whether ITC is available to the

insurer where the invoice for the

repair of the vehicle is not in name

of the insurance company.

In such a case, condition of Clause (a) and (aa) of

Section 16(2) of CGST Act is not satisfied and

accordingly, input tax credit will not be available to the

insurance company in respect of such an invoice.

3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

4. Difficulty, if any, in the implementation of this Circular may be brought to the notice of the

Board. Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1619

Subject: Clarification regarding taxability of the transaction of providing loan by an overseas affiliate to

its Indian affiliate or by a person to a related person–reg.

Ref.: Circular No. 218/12/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 12/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 218/12/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

(Department of Revenue)

Central Board of Indirect Taxes and Customs

GST Policy Wing

*****

North Block, New Delhi

Dated the 26thJune, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/

/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

OFFICIAL GAZETTE — GOVT. OF GOA

SERIES II No. 17

(EXTRAORDINARY No. 2)

30TH JULY, 2024

387

Madam/Sir,

Subject: Clarification regarding taxability of the transaction of providing loan by an overseas affiliate to

its Indian affiliate or by a person to a related person-reg.

Representations have been received from trade and industry seeking clarity on whether there is any

supply involved in the transaction of granting of loan by a person to a related person or by an overseas

affiliate to its Indian entity, where the consideration being paid is only by way of interest or discount,

and whether any GST is applicable on the same.

2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law

across the field formations, the Board, in exercise of its powers conferred by Section 168 (1) of the Central

Goods and Services Tax Act, 2017 (hereinafter referred to as ―CGST Act‖), hereby clarifies the issues as

under:

S. No.

Issue

Clarification

Clarification regarding taxability of the transaction of providing loan by an overseas entity to its Indian

related entity or by a person in India to a related person

Whether

the

activity

providing

loans

overseas

affiliate

its

Indian affiliate or by a person

to a related person, where

there is no consideration in

the nature of processing fee/

/administrative

charges/

loan granting charges etc.,

and

the

consideration

represented only by way of

interest or discount, will be

treated as a taxable supply

of service under GST or not.

1. As per Clause (c) of sub-section (1) of section 7 of the CGST

Act, read with S. No. 2 and S. No. 4 of Schedule I of CGST Act,

supply of goods or services or both between related persons,

when made in the course or furtherance of business, shall be

treated as supply, even if made without consideration.

Therefore, it is evident that the service of granting loan/credit/

/advances by an entity to its related entity is a supply under

GST.

2. Services by way of extending deposits, loans or advances in

so far as the consideration is represented by way of interest or

discount (other than interest involved in credit card services)

are exempted under sub entry (a) of entry 27 of Notification No.

12/2017-Central Tax (Rate). Therefore, it is clear that the supply

of services of granting loans/credit/advances, in so far as the

consideration is represented by way of interest or discount, is

fully exempt under GST.

3. It is mentioned that overseas affiliates or domestic related

persons are generally charging no consideration in the form of

processing fee/service fee, other than the consideration by way

of interest or discount on the loan amount. Doubts are being

raised

regarding

the

taxability

the

services

processing/administering/facilitating the loan in such cases, by

deeming

the

same

supply

per

clause

(c)

sub-section (1) of Section 7 of the CGST Act, read with S. No. 2

and S. No. 4 of Schedule I of CGST Act. The processing fee/

service fee is generally a one-time charge that lenders levy on

applicants when they apply for a loan. This fee is generally non-

refundable and is used to cover the administrative cost of

processing the loan application. Charges of any other nature in

respect of loan, other than by way of interest or discount, would

represent

taxable

consideration

for

providing

the

facilitation/processing/administration services for the loan and

hence would be liable to GST. This has been clarified at serial

number 42 in the Sectoral FAQ on Banking, Insurance and Stock

Brokers Sector issued by CBIC.

4. It is significant to note that the processing/service fee is

generally charged by the bank/financial institution from the

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recipient of the loan in order to cover the administrative cost of

processing the loan application. An independent lender may

carry out a thorough credit assessment of the potential

borrower to identify and evaluate the risks involved and to

consider methods of monitoring and managing these risks.

Such credit assessment may include understanding the

business of the applicant, as well as the purpose of the loan,

financial standing and credibility of the applicant, how it is to

be structured and the source of its repayment which may

include analysis of the borrower‘s cash flow forecasts, the

strength of the borrower‘s balance sheet, and where any

collateral is offered, due diligence on the collateral offered may

also be required to be carried out. To cover such costs, the

independent lender generally collects a fee that is in the nature

of processing fee/administrative charges/service fee/loan

granting charges, which is leviable to GST.

5. However, when an entity is extending a loan to a related

entity, it may not require to follow such processes as are

followed by an independent lender. For example, it may not

need to go through the same process of information gathering

about the borrower‘s business, his financial standing and

credibility and other details, as the required information may

already be readily available within the group, or between

related persons. The lender may not also take any collateral

from the borrower. Accordingly, in case of loans provided

between related parties, there may not be the activity of

‗processing‘ the loan, and no administrative cost may be

involved in granting such a loan. Therefore, it may not be

desirable to place the services being provided for processing

the loans by banks or independent lenders vis-a-vis the loans

provided by a related party, on equal footing.

6. Even in case of loans provided between unrelated parties,

there may not be any processing fee/administrative charges/

/loan granting charges etc., based on the relationship

between the bank/independent lender and the person taking

the loan. The lender might waive off the administrative

charges in full, based on the nature and amount of loan

granted, as well as based on the relationship between the

lender and the concerned person taking the loan.

7. Accordingly, in the cases, where no consideration is

charged by the person from the related person, or by an

overseas affiliate from its Indian party, for extending loan or

credit, other than by way of interest or discount, it cannot be

said that any supply of service is being provided between the

said

persons

the

form

processing/

/facilitating/administering the loan, by deeming the same as

supply of services as per Clause (c) of sub-section (1) of

Section 7 of the CGST Act, read with S. No. 2 and S. No. 4 of

Schedule I of CGST Act. Accordingly, there is no question of

levy of GST on the same by resorting to open market value for

valuation of the same as per rule 28 of Central Goods and

Services Tax Rules, 2017.

8. However, in cases of loans provided between related

parties, wherever any fee in the nature of processing fee/

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389

/administrative charges/service fee/loan granting charges etc.

is charged, over and above the amount charged by way of

interest or discount, the same may be considered to be the

consideration for the supply of services of processing/

/facilitating/administering of the loan, which will be liable to

GST as supply of services by the lender to the related person

availing the loan.

3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

4. Difficulties, if any, in implementing this Circular may please be brought to the notice of the Board.

Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1620

Subject: Clarification on availability of input tax credit on ducts and manholes used in network of

Optical Fiber Cables (OFCs) in terms of Section 17(5) of the CGST Act, 2017–reg.

Ref.: Circular No. 219/13/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 13/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 219/13/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

*****

North Block, New Delhi,

Dated the 26th June, 2024

OFFICIAL GAZETTE — GOVT. OF GOA

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(EXTRAORDINARY No. 2)

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390

To,

The Principal Chief Commissioners/Chief Commissioners/

/Principal Commissioners/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

Madam/Sir,

Subject: Clarification on availability of input tax credit on ducts and manholes used in network of Optical

Fiber Cables (OFCs) in terms of Section 17(5) of the CGST Act, 2017-reg.

Representations have been received from Cellular Operators Association of India (COAI) submitting

that Input Tax Credit (ITC) is being denied by some tax authorities on ducts and manholes used in

network of Optical Fiber Cables (OFCs) on the ground that the same is blocked as per section 17(5) of the

Central Goods & Services Tax Act, 2017 (hereinafter referred to as the ‗CGST Act‖), being in nature of

immovable property (other than Plant and Machinery). It has been requested to issue clarification in

respect of availability of ITC on ducts and manholes used in network of Optical Fiber Cables (OFCs), so

as to prevent unwarranted litigation in the telecommunication sector across the country.

2. In order to ensure uniformity in the implementation of the provisions of law across the field

formations, the Board, in exercise of its powers conferred by Section 168 (1) of the CGST Act, hereby

clarifies the issue as below.

Issue

Clarification

Whether the input tax

credit on the ducts and

manholes used in network

of Optical Fiber Cables

(OFCs)

for

providing

telecommunication servi-

ces is barred in terms

of clauses (c) and (d) of

sub-section (5) of section

17 of the CGST Act, read

with

Explanation

section 17 of CGST Act ?

1. Sub-section (5) to Section 17 of the CGST Act provides that input tax

credit shall not be available, inter alia, in respect of the following:

i. works contract services when supplied for construction of an

immovable property (other than plant and machinery) except where

it is an input service for further supply of works contract service; or

ii. goods or services or both received by a taxable person for

construction of an immovable property (other than plant or

machinery) on his own account including when such goods or

services or both are used in the course or furtherance of business.

2. Explanation in Section 17 of CGST Act provides that the expression

‖plant and machinery‖ means apparatus, equipment, and machinery fixed

to earth by foundation or structural support that are used for making

outward supply of goods or services or both and includes such foundation

and structural supports but excludes land, building or any other civil

structures; telecommunication towers; and pipelines laid outside the

factory premises.

3. Ducts and manholes are basic components for the Optical Fiber Cable

(OFC) network used in providing telecommunication services. The OFC

network is generally laid with the use of PVC ducts/sheaths in which

OFCs are housed and service/connectivity manholes, which serve as

nodes of the network, and are necessary for not only laying of optical fiber

cable but also their upkeep and maintenance. In view of the Explanation

in section 17 of the CGST Act, it appears that ducts and manholes are

covered under the definition of ―plant and machinery‖ as they are used as

part of the OFC network for making outward supply of transmission of

telecommunication signals from one point to another. Moreover, ducts and

manholes used in network of Optical Fiber Cables (OFCs) have not been

specifically excluded from the definition of ―plant and machinery‖ in the

Explanation to Section 17 of CGST Act, as they are neither in nature of

land, building or civil structures nor are in nature of telecommunication

towers or pipelines laid outside the factory premises.

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4. Accordingly, it is clarified that availment of input tax credit is not

restricted in respect of such ducts and manhole used in network of Optical

Fiber Cables (OFCs), either under Clause (c) or under Clause (d) of

sub-section (5) of Section 17 of CGST Act.

3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

4. Difficulty, if any, in the implementation of this Circular may be brought to the notice of the

Board. Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1621

Subject: Clarification on place of supply applicable for custodial services provided by banks to Foreign

Portfolio Investors–reg.

Ref.: Circular No. 220/14/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 14/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 220/14/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

North Block, New Delhi

Dated the 26th June, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/Principal

Commissioners/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

OFFICIAL GAZETTE — GOVT. OF GOA

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(EXTRAORDINARY No. 2)

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392

Madam/Sir,

Subject: Clarification on place of supply applicable for custodial services provided by banks to Foreign

Portfolio Investors-reg.

Representations have been received seeking clarification on the Place of Supply in cases of Custodial

Services provided by Banks to Foreign Portfolio Investors (hereinafter referred to as ―FPIs‖), as a view is

being taken by some field formations that the Place of Supply in case of ‗custodial service‘ would be

determined as per Section 13(8)(a) of the Integrated Goods and Services Tax Act, 2017 (hereinafter

referred to as ―IGST Act‖), i.e. the location of the service provider (banks or financial institutions).

2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law

across the field formations, the Board, in exercise of its powers conferred by Section 168(1) of the Central

Goods and Services Tax Act, 2017 (hereinafter referred to as ―CGST Act‖), hereby clarifies the issue as

under:

Issue

Clarification

Whether the activity of

providing Custodial

Services by banks or

financial institutions to

FPIs will be treated as

services provided to

‗account holder‘ under

Section 13(8)(a) of the

IGST Act, 2017?

Further, how the place of

supply of the said

services shall be

determined?

According to the Securities and Exchange Board of India (Custodian of

Securities) Regulations 1996, ‗Custodial Services‘ in relation to securities

means safekeeping of securities of a client and providing services

incidental thereto, and includes–

 maintaining accounts of securities of a client;

 collecting the benefits or rights accruing to the client in respect of

securities;

 keeping the client informed of the actions taken or to be taken by the

issuer of securities, having a bearing on the benefits or rights

accruing to the client; and

 maintaining and reconciling records of the services referred above.

As per Regulation 20(1) of the Securities and Exchange Board of India

(Foreign Portfolio Investors) Regulations, 2019, an FPI is allowed to invest

only in the following securities, namely–

(a) shares, debentures and warrants issued by a body corporate; listed

or to be listed on a recognized stock exchange in India;

(b) units of schemes launched by mutual funds under Chapter V, VI-A

and VI-B of the Securities and Exchange Board of India (Mutual

Fund) Regulations, 1996;

accordance with the Securities and Exchange Board of India

(Collective Investment Schemes) Regulations, 1999;

(d) derivatives traded on a recognized stock exchange;

(e) units of real estate investment trusts, infrastructure investment

trusts and units of Category III Alternative Investment Funds

registered with the Board;

(f) Indian Depository Receipts;

(g) any debt securities or other instruments as permitted by the Reserve

Bank of India for foreign portfolio investors to invest in from time to

time; and

(h) such other instruments as specified by the Board from time to time.

Various banks enter into custodial agreements with the Foreign Portfolio

Investors (FPIs) for the provision of such custodial services. The main

activity carried out by banks as a custodian in relation to custodial

services is maintaining account of the securities held by the FPIs.

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As per Clause (a) of sub-section (8) of Section 13 of IGST Act, Place of

Supply of services supplied by banking company or a financial institution

or a non-banking company to account holders shall be the location of the

supplier of services.

As per Explanation (a) of Section 13(8) of IGST Act, ‗account‘ means an

account bearing interest to the depositor, and includes a non-resident

external account and a non-resident ordinary account.

It is mentioned that the provisions similar to above provisions under IGST

Act existed during the Service Tax regime. The place of provision of

service under Service Tax was governed by the Service Tax Place of

Provision of Supply Rules, 2012. Provisions of Rule 9(a) of the Service Tax

Place of Provision of Supply Rules, 2012 were identical to that of Section

13(8)(a) of the IGST Act. The Education Guide under the Service Tax Law

clarified the scope of the term ―account holder‖ and the services provided

by banks to account holders as well as the services which are not provided

to account holders, as below:

―Question: 5.9.2 What is the meaning of ―account holder‖? Which

accounts are not covered by this rule?

Answer: ―Account‖ has been defined in the rules to mean an account

which bears an interest to the depositor. Services provided to holders of

demand deposits, term deposits, NRE (non-resident external) accounts

and NRO (non-resident ordinary) accounts will be covered under this rule.

Question: 5.9.3 What are the services that are provided by a banking

company to an account holder (holder of an account bearing interest to

the depositor)?

Answer: Following are examples of services that are provided by a

banking company or financial institution to an ―account holder‖, in the

ordinary course of business:—

services linked to or requiring opening and operation of bank

accounts such as lending, deposits, safe deposit locker etc.;

ii) transfer of money including telegraphic transfer, mail transfer,

electronic transfer etc.

Question: 5.9.4 What are the services that are not provided by a banking

company or financial institution to an account holder, in the ordinary

course of business, and will consequently be covered under another Rule?

Answer: Following are examples of services that are generally NOT

provided by a banking company or financial institution to an account

holder (holder of a deposit account bearing interest), in the ordinary

course of business:-

financial leasing services including equipment leasing and hire

purchase;

ii) merchant banking services;

iii) Securities and foreign exchange (forex) broking, and purchase or sale

of foreign currency, including money changing;

iv) asset management including portfolio management, all forms of fund

management, pension fund management, custodial, depository and

trust services

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In the case of any service which does not qualify as a service

provided to an account holder, the place of provision will be determined

under the default rule i.e. the Main Rule 3. Thus, it will be the location

of the service receiver where it is known (ascertainable in the ordinary

course of business), and the location of the service provider otherwise.‖

Accordingly, as per clarification given in Education Guide under Service

Tax Regime, the custodial services are not considered to be covered under

the services provided by bank to account holders, but have been

considered to be covered under the services which are not provided to

account holder.

As the provisions of Section 13(8)(a) of the IGST Act are similar to the

provisions of Rule 9(a) of the Service Tax Place of Provision of Supply Rules,

2012, the clarification given in the Education Guide under Service Tax

Regime is equally applicable under GST Regime.

Accordingly, it is clarified that the custodial services provided by banks or

financial institutions to FPIs are not to be treated as services provided to

‗account holder‘ and therefore, the said services are not covered under

Section 13(8)(a) of the IGST Act. Therefore, the place of supply of such

services is not to be determined under Section 13(8)(a) of the IGST Act but

has to be determined under the default provision i.e., sub-section (2) of

Section 13 of the IGST Act.

2. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

3. Difficulty, if any, in implementation of the above instructions may please be brought to the notice of

the Board. Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1622

Subject: Clarification on time of supply in respect of supply of services of construction of road and

maintenance thereof of National Highway Projects of National Highways Authority of India

(NHAI) in Hybrid Annuity Mode (HAM) model–reg.

Ref.: Circular No. 221/15/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 15/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

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ANNEXURE

Circular No. 221/15/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

(Department of Revenue)

Central Board of Indirect Taxes and Customs

GST Policy Wing

*****

North Block, New Delhi

Dated the 26th June, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/

/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

Madam/Sir,

Subject: Clarification on time of supply in respect of supply of services of construction of road and

maintenance thereof of National Highway Projects of National Highways Authority of India

(NHAI) in Hybrid Annuity Mode (HAM) model–reg.

Representations have been received from the trade and the field formations seeking clarification

regarding the time of supply in respect of supply of services of construction of road and maintenance

thereof of National Highway Projects in Hybrid Annuity Mode (HAM) model, where certain portion of Bid

Project Cost is received during construction period and remaining payment is received through deferred

payment (annuity) spread over years.

2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law

across the field formations, the Board, in exercise of its powers conferred by Section 168 (1) of the Central

Goods and Services Tax Act, 2017 (hereinafter referred to as―CGSTAct‖), hereby clarifies the issues as

under:

S. No.

Issue

Clarification

Under HAM model of National

Highways Authority of India (NHAI),

the concessionaire has to construct

the

new

road

and

provide

Operation & Maintenance of the

same which is generally over a

period of 15-17 years and the

payment of the same is spread

over the years. What is the time of

supply for the purpose of payment

of tax on the said service under the

HAM model?

Under the Hybrid Annuity Model (HAM) of concession

agreements, the highway development projects are

under Design, Build, Operate and Transfer model

(DBOT), wherein the concessionaire is required to

undertake new construction of Highway, as well as

the Operation and Maintenance (O&M) of Highways.

The payment terms for the construction portion as

well as the O&M portion of the contract are provided

in the agreement between National Highways

Authority of India (NHAI) and the concessionaire.

2.1 A HAM contract is a single contract for

construction as well as operation and maintenance of

the highway. The payment terms are so staggered

that the concessionaire is held accountable for the

repair and maintenance of the highway as well. The

contract needs to be looked at holistically based on

the services to be performed by the concessionaire

and cannot be artificially split into two separate

contracts

for

construction

and

operation

and

maintenance, based on the payment terms. The

concessionaire is bound contractually to complete not

only the construction of the highway but also to

operate and maintain the same.

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2.2 In HAM contract, the payment is made spread

over the contract period in installments and payment

for each installment is to be made after specified

periods, or on completion of an event, as specified in

the contract. The same appears to be covered under

the ‗Continuous supply of services‘ as defined under

section 2(33) of the CGST Act.

2.3 As per clause (a) of Section 13(2) of CGST Act, the

time of supply in respect of a supply of services shall

be the date of issue of Invoice, or date of receipt of

payment, whichever is earlier, in cases where invoice

is issued within the period prescribed under section

31 of CGST Act. Further, as per clause (b) of Section

13(2) of CGST Act, in cases where invoice is not

issued within the period prescribed under section 31,

the time of supply of service shall be date of provision

of the service or date of receipt of payment,

whichever is earlier. However, as per section 31(5) of

CGST Act, in cases of continuous supply of services,

where the payment is made periodically, either due

on a specified date or is linked to the completion of an

event, the invoice is required to be issued on or before

the specified date or the date of completion of that

event.

2.4 Accordingly, as per section 13(2) of CGST Act,

read with section 31(5) of CGST Act, time of supply of

services under HAM contract, including construction

and O&M portion, should be the date of issuance of

such invoice, or date of receipt of payment,

whichever is earlier, if the invoice is issued on or

before the specified date or the date of completion of

the event specified in the contract, as applicable.

However, in cases, where the invoice is not issued on

or before the specified date or the date of completion

of the event specified in the contract, as per clause

(b) of section 13(2), time of supply should be the date

of provision of the service, or date of receipt of

payment, whichever is earlier. In case of continuous

supply of services, the date of provision of service

may be deemed as the due date of payment as per

the contract, as the invoice is required to be issued

on or before the due date of payment as per the

provisions of Section 31(5) of CGST Act.

3. In the light of above, it is clarified that the tax

liability on the concessionaire under the HAM

contract, including on the construction portion, would

arise at the time of issuance of invoice, or receipt of

payments, whichever is earlier, if the invoice is

issued on or before the specified date or the date of

completion of the event specified in the contract, as

applicable. If invoices are not issued on or before the

specified date or the date of completion of the event

specified in the contract, tax liability would arise on

the date of provision of the said service (i.e., the due

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date of payment as per the contract), or the date of

receipt of the payment, whichever is earlier.

4. It is also clarified that as the installments/annuity

payable by NHAI to the concessionaire also includes

some interest component, the amount of such

interest shall also be includible in the taxable value

for the purpose of payment of tax on the said

annuity/installment in view of the provisions of

section 15(2)(d) of the CGST Act.

3. It is requested that suitable trade notices may be issued to publicize the contents of this

Circular.

4. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

Board. Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1623

Subject: Clarification on time of supply of services of spectrum usage and other similar services under

GST-reg.

Ref.: Circular No. 222/16/2024-GST dated 26th June, 2024 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, Government of India, New Delhi.

Circular

(No. 16/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 222/16/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

(Department of Revenue)

Central Board of Indirect Taxes and Customs

GST Policy Wing

*****

North Block, New Delhi

Dated the 26th June, 2024

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To,

The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/

Commissioners of Central Tax (All)

The Principal Directors General/ Directors General (All)

Madam/Sir,

Subject: Clarification on time of supply of services of spectrum usage and other similar services under

GST-reg.

Representations have been received from the trade and the field formations seeking clarification

regarding the time of supply for payment of GST in respect of supply of spectrum allocation

services in cases where the successful bidder for spectrum allocation (i.e. the telecom operator)

opts for making payments in instalments under deferred payment option as per Frequency

Assignment Letter (FAL) issued by Department of Telecommunication (DoT), Government of India.

2. In order to clarify the issue and to ensure uniformity in the implementation of the provisions of law

across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the

Central Goods and Services Tax Act, 2017 (hereinafter referred to As―CGSTAct‖), hereby clarifies the

issues as under:

S. No.

Issue

Clarification

In cases of spectrum allocation

where the successful bidder

(i.e. the ‗telecom operator‘) opts

for

making

payments

instalments as mentioned in the

Notice Inviting Application (NIA)

and

Frequency

Assignment

Letter

(FAL)

issued

Department of Telecommunica-

tions (DoT), Government of India,

what will be the time of supply

for the purpose of payment of

GST on the said supply of

spectrum allocation services.

Under the spectrum allocation model followed by DoT,

bidder (the telecom operator) bids for securing the right to

use spectrum offered by the government. Here, service

provider is the Government of India (through DoT) and

service recipient is the bidder/telecom operator. The GST

is to be discharged on the supply of spectrum allocation

services by the recipient of services (the telecom operator)

on reverse charge basis [Notification No. 13/2017-Central

Tax (Rate) dated 28^th June, 2017 referred].

2.1 In respect of the said supply of spectrum allocation

services, if the telecom operator chooses the option to

make payment in installments, the payment has to be

made spread over the contract period in installments and

payment for each installment is to be made after specified

periods, as specified in the Frequency Assignment Letter

of DoT, which is in the nature of contract. The same is a

‗continuous supply of services‘ as defined under section

2(33) of the CGST Act, since the supply of services

(spectrum usage) is agreed to be provided by the supplier

(DoT) to the recipient (telecom operator) continuously for

a period which is exceeding three months with periodic

payment obligations.

2.2 As per section 13(1) of CGST Act, the liability to pay

tax on supply of services shall arise at the time of supply.

In case of forward charge supplies, the time of supply of

services is governed by section 13(2) of CGST Act, which

is the earlier of date of issue of invoice by the supplier or

date of provision of service or the date of payment, as the

case may be.

2.3 However, in respect of supply of services, on which

tax is paid or liable to be paid on reverse charge basis, as

per Section 13(3) of CGST Act, 2017, the time of supply of

services shall be the earlier of the following dates,

namely:-

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(a) the date of payment as entered in the books of account

of the recipient or the date on which the payment is

debited in his bank account, whichever is earlier; or

(b) the date immediately following sixty days from the

date of issue of invoice or any other document, by

whatever name called, in lieu thereof by the supplier.

2.3.1 Some of the field formations are considering the

Frequency Assignment Letter issued by DoT as akin to

any other document, by whatever name called, in lieu of

an invoice mentioned in clause (b) of section 13(3) of

CGST Act and are demanding interest on instalments

paid after 60 days from the date of issue of the same.

2.3.2

It is observed that Frequency Assignment Letter is

in the nature of a bid acceptance document intimating the

telecom operator that the result of the auction has been

accepted by the competent authority and the details of

blocks and spectrum allotted to the telecom operator. The

Frequency Allotment Letter also mentions the options and

the amounts to be paid by the telecom operator in each of

the two options.

2.4 Further, as per section 31(5)(a) of CGST Act, in cases

of continuous supply of services, where the due date of

payment is ascertainable from the contract, the invoice

shall be issued on or before such due date of payment. In

the instant case, the date of payment to be made by the

telecom operator to DoT is clearly ascertainable from the

Notice Inviting Applications read with the Frequency

Assignment Letter. Accordingly, tax invoice will be

required to be issued in respect of the said supply of

services, on or before such due date of payment as per the

option exercised by the telecom operator.

3. In the light of above, it is clarified that in case where

full upfront payment is made by the telecom operator,

GST would be payable when the payment of the said

upfront amount is made or is due, whichever is earlier,

whereas in case where deferred payment is made by the

telecom operator in specified installments, GST would be

payable as and when the payments are due or made,

whichever is earlier.

4. It is also clarified that the similar treatment regarding

the time of supply, as is discussed in the above paras,

may apply in other cases also where any natural

resources are being allocated by the government to the

successful bidder/purchaser for right to use the said

natural resource over a period of time, constituting

continuous supply of services as per the definition under

Section 2(33) of the CGST Act, with the option of

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400

payments for the said services either through an upfront

payment or in deferred periodic installments over the

period of time.

3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

4. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

Board. Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1624

Subject: Guidelines for recovery of outstanding dues, in cases wherein first appeal has been disposed of,

till Appellate Tribunal comes into operation.

Ref.: Circular No. 224/18/2024-GST dated 11th July, 2024 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, Government of India, New Delhi.

Circular

(No. 17/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 224/18/2024-GST

CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

****

New Delhi, Dated the 11th July, 2024

To,

The Pr. Chief Commissioners/Chief Commissioners/Principal Commissioners/

/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

Madam/Sir,

Subject: Guidelines for recovery of outstanding dues, in cases wherein first appeal has been disposed of,

till Appellate Tribunal comes into operation.

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Doubts have been raised by the trade and the field formations in respect of recovery of outstanding

dues, in cases where the first appellate authority has confirmed the demand created by the adjudicating

authority, fully or partially, and where appeal against such order of appellate authority could not be filed

under Section 112 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as ‗the CGST

Act‘) due to non-constitution of Appellate Tribunal (hereinafter referred to as ‗Tribunal‘), as yet. Doubts

have also been raised as to whether the amount that was originally intended to be paid towards the

demand created but has inadvertently been paid and intimated by the taxpayer through FORM GST

DRC-03 either under the ‗voluntary‘ category or under the ‗others‘ category, can be adjusted against the

pre-deposit that is required to be paid by the taxpayer for filing appeal before the appellate authority

under section 107, and before the appellate tribunal under Section 112 of the CGST Act.

2. The matter has been examined. In order to clarify the issue and to ensure uniformity in the

implementation of the provisions of the law across field formations, the Board, in exercise of its powers

conferred by Section 168 (1) of the CGST Act, hereby issues the following clarifications and guidelines.

3. In cases, where the first appellate authority has confirmed the demand issued by the adjudicating

authority, partially or fully, the taxpayers cannot file appeal against the said appellate order at present

due to non-operation of GST Appellate Tribunal as yet. As per Section 112 of the CGST Act, every person

has statutory remedy of appeal against the order passed by the first appellate authority or by a revisional

authority, before the Tribunal. As per Section 78 of CGST Act, the recovery proceedings are to be

initiated, if the amount payable as per the order issued under the said act is not paid by the concerned

person within the said period of three months from the date of service of the said order. It may further be

noted

that

any

person

files

appeal

accordance

with

the

requirement

sub-section (8) of Section 112 of the CGST Act (i.e., on payment of prescribed pre-deposit), the recovery

proceedings for the balance amount is deemed to be stayed till disposal of the appeal as per

sub-section (9) of Section 112 of the CGST Act. However, as the taxpayers are not able to file appeal

under section 112 in Appellate Tribunal against the orders of appellate authority and therefore, are not

able to make the pre-deposit under sub-section (8) of Section 112 of CGST Act, in some cases, the tax

officers are taking a view that there is no stay against recovery as per sub-section (9) of Section 112 of

CGST Act. In some cases, taxpayers have either paid or are willing to pay the requisite amount of

pre-deposit as per sub-section (8) of Section 112 of CGST Act either by crediting in their electronic

liability register against the demand so created, or by depositing the said amount through FORM DRC-

03. However, tax officers are still resorting to recovery proceedings after completion of period stipulated

under Section 78 of CGST Act.

4. In order to facilitate the taxpayers to make the payment of the amount of pre-deposit as per

sub-section (8) of section 112 of CGST Act, and to avail the benefit of stay from recovery of the remaining

amount of confirmed demand as per sub-section (9) of section 112 of CGST Act, it is hereby clarified that

in cases where the taxpayer decides to file an appeal against the order of the appellate authority and

wants to make the payment of the amount of pre-deposit as per sub-section (8) of section 112 of CGST

Act, he can make the payment of an amount equal to the amount of pre-deposit by navigating to Services

>> Ledgers>> Payment towards demand, from his dashboard. The taxpayer would be navigated to

Electronic Liability Register (ELL) Part-II in which he can select the order, out of the outstanding demand

orders, against which payment is intended to be made. The amount so paid would be mapped against

the selected order and demand amount would be reduced in the balance liability in the aforesaid

required to be deposited at the time of filing appeal before the Appellate Tribunal.

5. The taxpayer also needs to file an undertaking/declaration with the jurisdictional proper officer that

he will file appeal against the said order of the appellate authority before the Appellate Tribunal, as and

when it comes into operation, within the timelines mentioned in section 112 of the CGST Act read with

Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03-12-2019. On

providing the said undertaking and on payment of an amount equal to the amount of pre-deposit as per

the procedure mentioned in para 4 above, the recovery of the remaining amount of confirmed demand as

per the order of the appellate authority will stand stayed as per provisions of sub-section (9) of section

112 of CGST Act.

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6. In case, the taxpayer does not make the payment of the amount equal to amount of pre-deposit or

does not provide the undertaking/declaration to the proper officer, then it will be presumed that tax

payer is not willing to file appeal against the order of the appellate authority and in such cases, recovery

proceedings can be initiated as per the provisions of law. Similarly, when the Tribunal comes into

operation, if the taxpayer does not file appeal within the timelines specified in Section 112 of the CGST

Act read with Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated

03-12-2019, the remaining amount of the demand will be recovered as per the provisions of law.

7.1 It has also been noticed that some taxpayers have already paid amounts that were intended to

have been paid towards a demand, through FORM GST DRC-03. Attention is invited to notification

No. 12/2024- CT dated 10-07-2024, vide which sub-rule (2B) of Rule 142 and FORM GST DRC-03A has

been inserted in Central Goods and Services Rules, 2017 (hereinafter referred to as ‗CGST Rules),

providing for a mechanism for cases where the person liable to pay tax, interest and penalty under

Section 52 or Section 73 or Section 74 or Section 76 or Section 122 or Section 123 or Section 124 or section

125 or Section 127 or Section 129 or section 130 of CGST Act has made payment of such tax, interest and

penalty, inadvertently through FORM GST DRC-03 under sub-rule (2) of Rule 142. In such cases, the said

person can file an application in FORM GST DRC-03A, electronically on the common portal, and the

amount so paid and intimated through the FORM GST DRC-03 shall be adjusted as if the said payment

was made towards the said demand on the date of such intimation through FORM GST DRC-03.

7.2 Accordingly, in cases where the concerned taxpayer has paid an amount that was intended to

have been paid towards a particular demand through FORM GST DRC-03, has submitted an application

in FORM GST DRC-03A on the common portal, the amount so paid and intimated through the FORM GST

DRC-03 will be considered as if the payment was made towards the said demand on the date of such

intimation through FORM GST DRC-03. The amount so paid shall also be liable to be adjusted towards

the amount required to be paid as pre-deposit under Section 107 and Section 112 of the CGST Act, if and

when the taxpayer files an appeal against the said demand, before the appellate authority or the

appellate tribunal, as mentioned in para 4 above, and the remaining amount of confirmed demand as per

the order of the adjudicating authority or the appellate authority, as the case may be, will stand stayed

as per provisions of sub-section (6) of Section 107 and sub-section (9) of Section 112 of CGST Act.

However, if the taxpayer does not file appeal within the timelines prescribed in Section 107 and Section

112 of the CGST Act, as the case may be, read with Central Goods and Services Tax (Ninth Removal of

Difficulties) Order, 2019 dated 03-12-2019, the remaining amount of the demand will be recovered as per

the provisions of law.

7.3 In this regard, it is to be mentioned that the application in FORM GST DRC-03A for adjustment of

demand liability against the payment through FORM GST DRC-03 cannot be made in cases where

against the payment made through the said FORM GST DRC-03, proceedings have already been

concluded by issuance of an order in FORM GST DRC-05 as per the Rule 142(3) of CGST Rules, 2017.

8.1 Currently, the above-mentioned functionality for filing of an application in FORM GST DRC-03A, is

not available on the common portal. Therefore, till the time such functionality is made available on the

common portal, in respect of cases where an amount of pre-deposit has been inadvertently paid through

FORM GST DRC-03 instead of making the said payment through Electronic Liability Ledger-II against the

demand created in the said ledger, the concerned taxpayer may intimate the proper officer about the

same, and on such intimation, the proper officer may not insist on recovery for the remaining amount

payable by the concerned taxpayer, till the time the said functionality of FORM GST DRC-03A is made

available on the portal.

8.2 Once the functionality of FORM GST DRC-03A is made available on the portal, the concerned

taxpayer may file an application in FORM GST DRC-03A, on the common portal, at the earliest, as

mentioned in para 7.1 above and on doing so, the amount paid vide FORM GST DRC-03 may be adjusted

against the pre-deposit under section 107 or section 112 of the CGST Act, as the case may be, as detailed

in para 7.2 above. However, in case the taxpayer fails to file an application in FORM GST DRC-03A on the

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common portal, the proper officer may proceed to recover the amount payable as per provisions of

section 78 and section 79 of CGST Act.

9. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

10. Difficulty, if any, in implementation of the above instructions may please be brought to the notice of

the Board. Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1625

Subject: Clarification on various issues pertaining to taxability and valuation of supply of services of

providing corporate guarantee between related persons.

Ref.: Circular No. 225/19/2024-GST dated 11th July, 2024 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, Government of India, New Delhi.

Circular

(No. 18/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 225/19/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

(Department of Revenue)

Central Board of Indirect Taxes and Customs

GST Policy Wing

*****

New Delhi, Dated the 11th July, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/Principal

Commissioners/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

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Madam/Sir,

Subject: Clarification on various issues pertaining to taxability and valuation of supply of services of

providing corporate guarantee between related persons.

1.1 As per the recommendations of the GST Council, sub-rule (2) was inserted in Rule 28 of Central

Goods and Services Tax Rules, 2017 (hereinafter referred to as the ―CGST Rules‖) vide Notification

No. 52/2023-Central Tax dated 26th October, 2023 to provide for a specific clause for valuation of supply

of services of providing corporate guarantee to any banking company or financial institution by an entity

on behalf of a related person. Besides, Circular No. 204/16/2023-GST dated 27th October, 2023 was also

issued as per the recommendations of the GST Council, to provide clarity regarding the applicability of

the said sub-rule. Subsequently, based on the recommendations of the GST Council, sub-rule (2) of Rule

28 of CGST Rules has been amended retrospectively with effect from 26.10.2023 vide notification

No. 12/2024 dated 10th July, 2024.

1.2 In this regard, various representations have been received from trade and industry, seeking

clarifications on various issues pertaining to the taxability and valuation of the supply of services of

providing corporate guarantee between related persons as per the said rule.

3. Therefore, in order to ensure uniformity in the implementation of the provisions of law a cross the

field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods

and Services Tax Act, 2017 (hereinafter referred to as ―CGST Act‖), hereby clarifies the issues as under:

S. No.

Issue

Clarification

Whether sub-rule (2) of

rule 28 of CGST Rules will

apply to the corporate

guarantees issued prior to

insertion of the said sub-

rule on 26^th October 2023?

Also, where intra-group

corporate guarantees have

been issued before 26^th

October 2023, which are

still in force today, would

they be liable to pay GST

on ―1% of the amount of

such guarantee offered‖

on such guarantees?

It is to be clarified that the supply of service of providing

corporate guarantee to any banking company or financial

institution by a supplier to a related recipient, on behalf of the

said recipient, was taxable even before the insertion of sub-rule

(2) in rule 28 of CGST Rules with effect from 26thOctober 2023.

Rule 28(2) of CGST Rules is only for determination of the value of

the taxable supply of providing corporate guarantee to any

banking company or financial institution by a supplier to a related

recipient, on behalf of the said recipient and not regarding the

taxability of the said supply itself. Prior to the insertion of the said

sub-rule, i.e., before 26th October 2023, the valuation of service of

providing corporate guarantee to any banking company or

financial institution by a supplier to a related recipient, on behalf

of the said recipient, was to be done as per the provisions of Rule

28 of CGST Rules, as it existed then.

Therefore, in respect of supply of services of providing corporate

guarantee between related persons, in respect of corporate

guarantee issued or renewed before 26th October, 2023, the

valuation of the said supply is to be done in accordance with Rule

28, as it existed during that time. However, if the corporate

guarantee is issued or renewed on or after 26th October, 2023,

then the valuation of the said supply will be required to be done

as per Rule 28(2) of CGST Rules.

cases

where

the

corporate

guarantee

provided for a particular

amount, whereas the loan

is only partly availed or

not availed at all by the

recipient, what will be the

value

supply

corporate guarantee. Also,

whether

the

recipient

The activity of supply of the service of providing a corporate

guarantee is not linked with the actual disbursal of the loan. The

service that is provided by the guarantor to the guarantee is that

of taking on the risk of default. Therefore, it is clarified that the

value of supply of the service of providing a corporate guarantee

will be calculated based on the amount guaranteed and will not

be based on the amount of loan actually disbursed to the

recipient of the corporate guarantee.

Further, it is also clarified that the recipient of the service of

providing corporate guarantee shall be eligible to avail the ITC,

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would be eligible to avail

full ITC (Input Tax Credit)

even before total loan is

disbursed?

subject to other conditions specified in the Act and the Rules

made thereunder, irrespective of when the loan is actually

disbursed to the recipient, and irrespective of the amount of loan

actually disbursed.

In the case of takeover of

existing loans, since there

is merely an assignment of

an already issued corpo-

rate guarantee, whether

GST would be applicable

again?

In the service of providing corporate guarantee to any banking

company or financial institution by a supplier to a related

recipient, on behalf of the said recipient, the supplier of the

service is the corporate entity providing the corporate guarantee

and the recipient is the related entity for whom the corporate

guarantee is provided by the said supplier.

Therefore, if the loan issued by the banking company/financial

institution is taken over by another banking company/financial

institution, the said activity of taking over of the loan does not fall

under the service of providing corporate guarantee to any

banking company or financial institution by a supplier to a

recipient. Therefore, it is clarified that in such cases, there will be

no impact on GST, unless there is issuance of fresh corporate

guarantee or there is a renewal of the existing corporate

guarantee. However, if the takeover of the loan is followed/

accompanied by issuance of fresh corporate guarantee, then GST

would be payable on the same.

Where corporate guaran-

tee is provided by more

than

one

entity/co-

guarantor, what is the

amount on which GST is

payable

each

co-

guarantor?

In cases where corporate guarantee is being provided by

multiple related entities, the value of such services of providing

corporate guarantee shall be the sum of the actual consideration

paid/payable to co-guarantors, if the said amount of total

consideration is higher than one per cent of the amount of such

guarantee offered. In cases where the sum of the actual

consideration is less than one per cent of the amount of such

guarantee offered, then GST shall be payable by each

co-guarantor proportionately on one per cent of the amount

guaranteed by them.

For instance, if there are two co-guarantors, A and B, who jointly

provide a corporate guarantee to a banking/financial institution

on behalf a related recipient C for Rs. 1 crore, then A and B shall

each pay GST on 0.5% of the amount guaranteed.

However, if in the above case of A and B providing corporate

guarantee jointly to a banking/financial institution on behalf a

related recipient C for Rs 1 crore, A provides guarantee for 60% of

the guarantee amount and B provides guarantee for the

remaining 40% of the guaranteed amount, then GST shall be

payable by A and B proportionately i.e., 0.6% and 0.4% of the

amount guaranteed. This is to say that A shall pay GST on 1% of

the amount guaranteed by A, i.e., 1% on Rs. 60 lakhs and B shall

pay GST on 1% of the amount guaranteed by B, i.e., 1% on Rs. 40

lakhs.

Where

intra-group

corporate

guarantee

issued, whether GST may

be paid by the recipient

It is clarified that in cases where domestic corporates issue intra-

group guarantees, GST is to be paid under forward charge

mechanism, and invoice is to be issued by the supplier of the

service of providing corporate guarantee to the related recipient

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under reverse charge, as

in the absence of actual

invoice and payment, the

recipient entity may not be

able to claim input tax

credit of tax paid by the

domestic guarantor?

under Section 31 of CGST Act, 2017 read along with the relevant

rules.

However, in cases where such guarantee is provided by the

foreign/overseas entity for a related entity located in India, then

GST would be payable under reverse charge mechanism, by the

recipient of service, i.e., the related entity located in India.

Whether the discharge of

tax liability on corporate

guarantee @ 1% of such

guarantee offered is to be

done one time or on yearly

basis or on monthly basis

and when issued for a

fixed term of say, five

years or ten years as per

tenure of the loan?

Rule 28(2) of CGST Rules has been amended retrospectively with

effect from 26th October, 2023, vide notification No. 12/2024-CT

dated 10-07-2024.

Therefore, it is clarified that the value of supply of the service of

providing corporate guarantee to a banking company or a

financial institution on behalf of a related recipient shall be one

per cent of the amount guaranteed per annum or the actual

consideration, whichever is higher.

Accordingly, the value of supply of the service of providing

corporate guarantee to a banking company or a financial

institution on behalf of a related recipient for a particular number

of years shall be one per cent of the amount of such guarantee

offered multiplied by the number of years for which the said

guarantee is offered or the actual consideration whichever is

higher.

In addition to the above, in cases where the corporate guarantee

is provided for a period less than a year, say 6 months (half a

year), then in those cases as well, the valuation may be done on

proportionate basis for the said period, i.e., in this case, the value

of the said supply of services may be taken as half of one per cent

of the amount of such guarantee offered (6/12 * one per cent), or

the actual consideration, whichever is higher.

To illustrate the same, if a corporate guarantee is issued for a

period of say five years, then the value of such guarantee is to be

calculated at one per cent per year of the amount of such

guarantee offered, or the actual consideration, whichever is

higher, i.e., the value of such corporate guarantee provided would

be 5% of the amount guaranteed or the actual consideration,

whichever is higher. Therefore, GST would be payable on such

amount at the time of issuance of such corporate guarantee, i.e.,

5% of the amount guaranteed or the actual consideration,

whichever is higher.

However, if a corporate guarantee is issued, say for a period of

one year and is renewed five times, for a period of one year each,

then tax would be payable on one per cent of the amount of such

guarantee offered, or the actual consideration, whichever is

higher, on the issue of such corporate guarantee in the first year

as well as on every renewal in subsequent years.

Whether the benefit of

second proviso to sub-rule

(1),

which

states

that

value declared in invoice

Proviso has been inserted in sub-rule (2) of Rule 28 of CGST Rules,

retrospectively with effect from 26th October, 2023 vide

notification No. 12/2024-CT dated 10-07-2024, similar to that

provided in the second proviso to sub-rule (1) of Rule 28 of CGST

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is deemed to be the open

market

value

cases

where full input tax credit

available

the

recipient of services, is not

applicable in cases falling

under sub-rule (2)?

Rules, to provide the benefit in cases involving supply of service

of corporate guarantees provided between related persons.

Accordingly, it is clarified that in cases involving the supply of

service of corporate guarantees provided between related

persons, where full input tax credit is available to the recipient of

services, the value declared in the invoice shall be deemed to be

the value of supply of the said service.

Whether the valuation in

terms of Rule 28(2) of

CGST Rules will apply to

the export of the service of

providing corporate gua-

rantee

between

persons?

As per the amendment done in sub-rule (2) of Rule 28 of CGST

Rules retrospectively w.e.f. 26th October, 2023 vide notification

No. 12/2024-CT dated 10-07-2024, the provisions of the said sub-

rule will not apply in cases where the recipient of the services of

providing corporate guarantee between related persons is

located outside India. Accordingly, the provisions of the said

sub-rule shall not apply to the export of the services of providing

corporate guarantee between related persons.

3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

4. Difficulties, if any, in implementation of this Circular may please be brought to the notice of the

Board. Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1626

Subject: Mechanism for refund of additional Integrated Tax (IGST) paid on account of upward revision in

price of the goods subsequent to export–reg.

Ref.: Circular No. 226/20/2024-GST dated 11th July, 2024 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, Government of India, New Delhi.

Circular

(No. 19/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

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ANNEXURE

Circular No. 226/20/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

****

New Delhi, Dated the 11th July, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/Principal

Commissioners/Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

Madam/Sir,

Subject: Mechanism for refund of additional Integrated Tax (IGST) paid on account of upward revision in

price of the goods subsequent to exports–reg.

Representations have been received from trade/industry requesting for prescribing a mechanism for

seeking refund of additional IGST paid on account of upward revision in price of goods subsequent to

export. It has been represented that there are cases where the price of export goods needs to be revised,

subsequent to their exports, due to various reasons such as linking of the prices of the export

commodities to some international index or as per the terms of contract between the two parties etc. In

such cases, where there is upward revision in price of goods subsequent to exports, the exporter is

required to pay additional IGST on account of upward price revision along with applicable interest but

there exists no mechanism for allowing them to claim refund of such additional IGST paid.

2. In order to ensure uniformity in the implementation of the provisions of the law across field

formations, the Board, in exercise of its powers conferred by Section 168(1) of the Central Goods and

Services Tax Act, 2017 (hereinafter referred to as ―CGST Act‖), hereby lays down the following procedure

for claim and processing of refunds of additional integrated tax paid on account of upward revision in

prices of goods subsequent to their exports.

3. Filing of refund claim for additional IGST paid on account of upward revision of prices of export

goods, subsequent to export:

3.1 The refund of IGST paid on account of export of goods is processed by the proper officer of

Customs in an automated manner without manual intervention in terms of provision of Rule 96 of Central

Goods and Services Tax Rules, 2017 (hereinafter referred to as ―CGST Rules‖). However, there exists no

mechanism for processing of refunds of any additional integrated tax paid on account of upward revision

in price of goods, subsequent to exports, by the proper officer of customs. Therefore, it has been decided

that such exporter may file an application for refund of such additional IGST paid in FORM GST RFD-01

electronically on the common portal and such application for refunds would be processed by the

jurisdictional GST officer of the concerned exporter. Accordingly, CGST Rules have been amended vide

Notification No. 12/2024-CT dated 10-07-2024 to provide for filing of such refund application in FORM

GST RFD-01, which shall be dealt with in accordance with provisions of rule 89 of CGST Rules.

3.2

GSTN is in the process of development of a separate category of refund in FORM GST RFD-01, for

filing an application of refund of such additional IGST paid. However, till the time such separate category

for claiming refund of additional amount of IGST paid is developed on the common portal, such

exporter(s) may claim refund of the additional IGST paid on account of upward revision in price of goods

subsequent to exports, by filing an application of refund in FORM GST RFD-01 under the category ―Any

other‖ with remarks ―Refund of additional IGST paid on account of increase in price subsequent to export

of goods‖ along with the relevant documents as prescribed in Clause (bb) of sub-rule (2) of Rule 89 of the

CGST Rules. The exporter shall also upload the statements 9A & 9B as prescribed in Clause (bb) &

Clause (bc) of sub-rule (2) of Rule 89 of the CGST Rules along with the said refund claim. The exporter

may also upload any other document to establish that the refund is admissible to him.

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3.3

The said refund application shall be processed based on the documentary proof submitted by the

refund applicant. Further, the validated details of shipping bills, amount of IGST involved in such

shipping bills, as well as the amount of IGST refund sanctioned by the customs under Rule 96(3) of CGST

Rules will also be made available to jurisdictional GST officers by GSTN to enable them to process such

refund claims of additional IGST paid.

4. Minimum Refund Amount: Sub-section (14) of Section 54 of the CGST Act provides that no refund

under sub-section (5) or sub-section (6) shall be paid to an applicant, if amount is less than one thousand

rupees. Therefore, no such refund shall be paid if the amount claimed is less than one thousand rupees.

5. Time limit for filing refund: Sub-rule (1B) of Rule 89 of CGST Rules, inserted vide Notification

No. 12/2024-CT dated 10-07-2024, provides that the application for refund of additional IGST paid can be

filed before the expiry of two years from the relevant date as per Clause (a) of Explanation (2) of Section

54 of the CGST Act. However, in cases, where the relevant date as per Clause (a) of Explanation (2) of

Section 54 of the CGST Act was before the date on which sub-rule (1B) of Rule 89 of CGST Rules has

come into force, such refund application can be filed before the expiry of a period of two years from the

date on which the said sub-rule has come into force.

6. The following documents are required to be accompanied with the refund claim in order to establish

that refund is due to such exporter:

(a)

Copy of shipping bill or bill of exports;

(b)

Copy of original invoices;

(c)

Copy of contract/other document(s), as applicable, indicating requirement for the revision in

price of such goods subsequent to exports;

(d)

Copy of the original invoices as well as relevant debit note(s)/supplementary invoices;

(e)

Proof of payment of additional IGST and applicable interest and details of the relevant FORM

GSTR-1/FORM GSTR-3B furnished by the applicant in which the said debit note(s)/

supplementary invoice(s) were declared and tax and interest thereon had been paid by the

applicant;

(f)

Proof of receipt of remittance of additional foreign exchange (FIRC) issued by Authorised

Dealer-I banks;

(g)

A certificate of a practising chartered accountant or a cost accountant certifying therein that

the said additional foreign exchange remittance is on account of such upward revision in price

of the goods subsequent to export;

(h)

Statement 9A of FORM GST RFD 01; and

(i)

Statement 9B of FORM GST RFD 01.

7. The proper officer while processing such refund claim shall verify that the exporter has duly

reported the details of the export invoice and the debit note in his statement of outward supplies in

FORM GSTR-1 and has duly paid such additional amount of IGST along with applicable interest for

which refund is being sought in their FORM GSTR-3B return. The proper officer while ascertaining the

eligibility of the refund to the exporter shall verify the revised value declared by the exporter in his FORM

GSTR-1/FORM GSTR-3B and details of foreign exchange remittances received thereof.

8. The proper officer shall scrutinize the application with respect to its completeness and eligibility

and only if the proper officer is satisfied that the whole or any part of the amount claimed is payable as

refund, he shall proceed to issue the refund sanction order in FORM GST RFD-06 and the payment order

in FORM GST RFD-05. The proper officer shall also upload a detailed speaking order along with the

refund sanction order in FORM GST RFD-06 in terms of Instruction No. 03/2022-GST dated 14-06-2022.

9. Further, there may be certain cases where there is downward revision in price of goods subsequent

to exports, when the export has been made with payment of IGST. In all such cases, the supplier of

goods/exporter is required to deposit the refund of the IGST received in proportion to the reduction in

price of exported goods, along with applicable interest. The proper officer while granting the refund as

per para 8 above, shall also verify whether the exporter has deposited the excess refund amount in the

cases where there is a downward revision in price of goods subsequent to exports, during the relevant

tax period, if any.

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10. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

Difficulty, if any, in the implementation of this Circular may be brought to the notice of the Board. Hindi

version will follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1627

Subject: Processing of refund applications filed by Canteen Stores Department (CSD)–regarding.

Ref.: Circular No. 227/21/2024-GST dated 11th July, 2024 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, Government of India, New Delhi.

Circular

(No. 20/2024-25-GST)

The GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry

of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 227/21/2024-GST

F. No. CBIC-20001/4/2024-GST

Government of India

Ministry of Finance

Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

*****

New Delhi, Dated the 11thJuly, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/

Commissioners of Central Tax (All)

The Principal Directors General/Directors General (All)

The Principal Chief Controller of Accounts, CBIC

Madam/Sir,

Subject: Processing of refund applications filed by Canteen Stores Department (CSD)–regarding

The Central Government, vide Notifications No. 06/2017-Central Tax (Rate), No. 06/2017-Integrated

Tax (Rate) and No. 06/2017-Union territory Tax (Rate), all dated 28th June, 2017, had specified the

Canteen Stores Department (―CSD‖ for short), under the Ministry of Defence, as a person who shall be

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entitled to claim a refund of fifty per cent of the applicable central tax, integrated tax and Union territory

tax paid by the CSD on all inward supplies of goods received by the CSD for the purposes of subsequent

supply of such goods to their Unit Run Canteens or to their authorized customers. Further, vide Circular

No. 60/34/2018-GST dated 04-09-2018, the manner and procedure for filing and processing of such refund

claims was specified so as to ensure that the CSD shall apply for refund by filing an application manually

to the jurisdictional tax office till the time the online utility for filing such refund claim is made available

on the common portal.

2. In order to enable such CSD to file application for refund electronically, a new functionality has been

made available on the common portal which allows CSD to apply for refund by filing an application

electronically on the common portal. Further, Central Goods and Service Tax Rules, 2017 (hereinafter

referred to as ‗CGST Rules‘) have been amended and a new Rule 95B and FORM GST RFD-10A have

been inserted in CGST Rules vide Notification No. 12/2024-Central Tax dated 10-07-2024.

3. In order to ensure uniformity in the implementation of the provisions of law across field formations,

the Board, in exercise of its powers conferred by Section 168 (1) of the Central Goods and Services Tax

Act, 2017 (hereinafter referred to as ―CGST Act‖), hereby lays down the following revised procedure for

electronic submission and processing of refund application by CSD, in accordance with Section 55 of

CGST Act, in supersession of Circular No. 60/34/2018-GST dated 04-09-2018.

4. Filing of refund application:

The CSD, who wants to wants to file an application for refund under Section 55 of CGST Act, in cases

where the refund is claimed of fifty per cent of the applicable central tax, integrated tax and Union

territory tax paid by the said CSD on all inward supplies of goods received by it, for the purposes of

subsequent supply of such goods to its Unit Run Canteens or to its authorized customers, shall file an

application for refund in FORM GST RFD-10A electronically on the common portal and the same shall be

processed electronically. The refund to be granted to the CSD shall be based on the invoices of the

inward supplies of goods received by it for the purposes of subsequent supply of such goods to its Unit

Run Canteens or to its authorized customers.

5. Filing of refund claim by CSD:

The CSD may apply for refund with the jurisdictional Central tax/State tax authority to whom the CSD

has been assigned. In terms of Rule 95B of the CGST Rules, the CSD is required to apply for refund once

in every quarter. The CSD will also be allowed to file the refund application for multiple quarters,

clubbing multiple FYs, as per their option. The refund of the tax paid by the CSD shall be available only if

the inward supplies of goods were received from a registered person against a tax invoice and details of

such supplies have been furnished by the said registered person in his details of outward supply in

FORM GSTR-1 and the said supplier has furnished his return in FORM GSTR-3B for the concerned tax

period. The CSD while filing the refund application shall ensure that all the invoices declared by it have

the GSTIN of the supplier and the GSTIN of the respective CSD clearly mentioned on them. The said

refund application form shall be accompanied with the following documents:

(i) An undertaking stating that the goods on which refund is being claimed have been received by

the CSD for the purposes of subsequent supply of such goods to its Unit Run Canteens or to its

authorized customers; and

(ii) A declaration stating that no refund has been claimed earlier against the invoices on which the

refund is being claimed.

6. Relevant date for filing of refund:

As per sub-section (2) of Section 54 of the CGST Act, a person notified under Section 55 of the CGST

Act, can file the application for refund of tax paid by it on inward supplies of goods or services or both,

before the expiry of two years from the last day of the quarter in which such supply was received.

Therefore, as the CSD have been notified under Section 55 of CGST Act vide notifications

No. 06/2017-Central Tax (Rate), No. 06/2017-Integrated Tax (Rate) and No. 06/2017-Union territory Tax

(Rate), all dated 28th June, 2017, as a person entitled to claim a refund of fifty per cent of the applicable

central tax, integrated tax and Union territory tax paid by it on all inward supplies of goods received for

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the purposes of subsequent supply of such goods to its Unit Run Canteens or to its authorized

customers, the CSD can file the refund of fifty per cent of tax paid on such inward supplies of goods

before expiry of two years from the last day of the quarter in which such supply was received.

7. Processing and sanction of the refund claim:

7.1 The proper officer shall process the refund claim filed by the CSD in a manner similar to the refund

claims filed in FORM GST RFD-01 under the provisions of Rule 89 of CGST Rules. The proper officer while

processing the refund application shall validate the GSTIN details of the CSD on the common portal to

ascertain whether all the returns in FORM GSTR-1 and FORM GSTR-3B, which were due to be furnished

on or before the date on which the refund application is being filed, have been filed. The proper officer

may scrutinize the details contained in FORM RFD-10A, FORM GSTR-3B and FORM GSTR-2B, for

processing the said refund claim. The proper officer shall also verify whether the details of the invoices

for which refund has been claimed by the CSD, have been furnished by the concerned supplier in his

details of outward supply in FORM GSTR-1 and the said supplier has furnished his return in FORM

GSTR-3B for the concerned tax period.

7.2 Further, the proper officer shall ensure that the amount of refund sanctioned is not more than 50%

of the central tax, state tax, Union territory tax and integrated tax paid on the supplies received by CSD.

It may be noted that the invoices uploaded by the CSD while filing will be validated on the portal with

FORM GSTR 2B of the applicant and only the validated invoices will be allowed in the application. The

invoices for which refund has already been availed by the CSD will be flagged in the system and will not

be allowed for the refund. The Table in Sl. No. 7 of FORM GST-RFD 10A will be auto-populated on the

portal based on the 50 % of the amount of respective tax (central tax, state tax, Union territory tax and

integrated tax) as per the Col. 8, 9 and 10 of the Table in Sl. No. 6 of FORM GST-RFD 10A.The Table in

Sl. No. 7 of FORM GST-RFD 10A shall be kept editable downwards, i.e., the CSD will be able to make a

downward revision in the auto-populated amount in the said Table and cannot enhance the auto-

populated amount in the said Table. The proper officer shall also verify whether the ITC in respect of

such inward supplies of goods received for the purposes of subsequent supply of such goods to its Unit

Run Canteens or to its authorized customers has been reversed by the CSD as clarified in Circular

No. 170/02/2022-GST dated 06 July, 2022.

7.3 The proper officer shall scrutinize the application with respect to completeness and eligibility of

the refund claim to his satisfaction and issue the order in FORM GST RFD-06 accordingly. The proper

officer shall also upload a detailed speaking order along with the said order in FORM GST RFD-06.

8. It is also mentioned that the provisions of the Circular No. 60/34/2018-GST dated 04-09-2018 shall

continue to apply for all refund applications filed manually before the amendments in CGST Rules

mentioned in Para 2 above and before the said functionality being made available on the common portal.

The said applications filed manually shall continue to be processed manually, according to the earlier

circular.

9. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

10. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

Board. Hindi version would follow.

Sd/- (Sanjay Mangal), Principal Commissioner (GST).

________

No. CCT/26-4/2024-25/G/1628

Subject: Clarifications regarding applicability of GST on certain services-reg.

Ref.: Circular No. 228/22/2024-GST dated 15th July, 2024 issued under Central Goods and Services

Tax Act, 2017 by the Tax Research Unit, Department of Revenue, Ministry of Finance,

Government of India, New Delhi.

Circular

(No. 21/2024-25-GST)

The Tax Research Unit, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India, New Delhi has issued the above referred Circular.

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For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the Tax Research Unit, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

_____

ANNEXURE

Circular No. 228/22/2024-GST

F. No. CBIC-190354/94/2024-TO(TRU-II)-CBEC

Government of India

Ministry of Finance

Department of Revenue

(Tax Research Unit)

North Block, New Delhi

Dated the 15th July, 2024

To,

The Principal Chief Commissioners/Chief Commissioners/

/Principal Commissioners/Commissioners of Central Tax (All)/

/The Principal Director Generals/Director Generals (All)

Madam/Sir,

Subject: Clarifications regarding applicability of GST on certain services–reg.

In exercise of the powers conferred under section 168(1) of the Central Goods and Services Tax Act,

2017 and on the recommendations of the 53^rd GST Council in its meeting held on 22^nd June, 2024, at New

Delhi, clarifications, related to the following issues are being issued through this circular:

GST exemption on the outward supplies made by the Ministry of Railways (Indian

Railways).

ii. GST exemption on the transactions between Special Purpose Vehicles (SPVs) and

Ministry of Railways (Indian Railways).

iii. Applicability of GST on the statutory collections made by the Real Estate Regulatory Authority

(RERA) in accordance with the Real Estate (Regulation and Development) Act, 2016.

iv. Applicability of GST on the incentive amount shared by acquiring bank with other stakeholders

in the digital payment ecosystem under the notified Incentive Scheme for promotion of RuPay

Debit Cards and low value BHIM-UPI transactions.

v. GST liability on the reinsurance of specified general and life insurance schemes.

vi. GST liability on the reinsurance of insurance schemes for which total premium is paid by the

Government.

vii. Applicability of GST on retrocession services.

viii. GST liability on certain accommodation services.

2. GST exemption on the outward supplies made by Ministry of Railways (Indian Railways).

2.1 Based on the request of Ministry of Railways (Indian Railways) and recommendations of the 52nd

GST Council meeting held on 07-10-2023, all supplies of goods and services made by Ministry of

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Railways (Indian Railways) were brought under Forward Charge Mechanism and consequently

exemptions that were available to Ministry of Railways (Indian Railways) were withdrawn vide

notification No. 13/2023-CT(R) dated 19-10-2023 w.e.f. 20-10-2023.

2.2 However, Ministry of Railways had brought out certain difficulties in implementation of the above

said notification and matter was examined by the 53rd GST Council in its meeting held on 22nd June,

2024.

2.3 GST Council has recommended to exempt the services provided by Ministry of Railways (Indian

Railways) to general public viz., sale of platform tickets, facility of retiring rooms/waiting rooms, cloak

room services and battery-operated car services. GST council has also recommended to exempt the

supply of services made between various zones/divisions under Ministry of Railways (Indian Railways).

Notification No. 04/2024-CT(R) dated 12-07-2024 has been issued in this regard and effective date of

implementation of the said notification is 15-07-2024.

2.4 The GST Council in its 53rd meeting has also recommended to regularize GST liability for the

intervening period i.e. from 20-10-2023 to 14-07-2024 on ‗as is where is‘ basis.

2.5 Therefore, as recommended by the 53rd GST Council, the GST on the services provided by Ministry

of Railways (Indian Railways) to general public viz., sale of platform tickets, facility of retiring rooms,

cloak room services and battery-operated car services and supply of services made between various

zones/divisions under Ministry of Railways (Indian Railways) is hereby regularized on ‗as is where is‘

basis from 20-10-2023 to 14-07-2024.

3. GST exemption on the transactions between Special Purpose Vehicles (SPVs) and Ministry of

Railways (Indian Railways).

3.1 Based on the recommendations of the 48th GST Council meeting held on 17-12-2022, it was

clarified to Ministry of Railways (Indian Railways) that supply of services by SPVs to Ministry of

Railways (Indian Railways) by way of allowing Indian Railways to use infrastructure built and owned by

them during the concession period against consideration and maintenance services supplied by Ministry

of Railways (Indian Railways) to SPVs are taxable.

3.2 However, Ministry of Railways had brought out certain difficulties faced in implementation of the

said recommendations of the 48th GST Council and matter was examined by the 53rd GST Council in its

meeting held on 22nd June, 2024.

3.3 GST Council has recommended to exempt the supply of service by SPVs to Ministry of Railways

(Indian Railways) by way of allowing Indian Railways to use the infrastructure built and owned by SPVs

during the concession period against consideration and maintenance services supplied by Ministry of

Railways (Indian Railways) to SPVs from GST. Notification No. 4/2024 CT(R) dated 12-07-2024 has been

issued in this regard.

3.4 The GST Council in its 53rd meeting has also recommended to regularize the past period in respect

of such transactions for the period from 01-07-2017 to 14-07-2024 on ‗as is where is basis.

3.5 Thus, as recommended by the 53rd GST Council, GST on the supply of services by SPVs to Ministry

of Railways (Indian Railways) by way of allowing it to use infrastructure built and owned by them during

the concession period against consideration and maintenance services supplied by Ministry of Railways

(Indian Railways) to SPVs in relation to such use of infrastructure built and owned by SPVs during the

concession period against consideration is hereby regularized for the period from 01-07-2017 to

14-07-2024 on ‗as is where is‘ basis.

4. Applicability of GST on the statutory collections made by the Real Estate Regulatory Authority

(RERA) in accordance with the Real Estate (Regulation and Development) Act, 2016.

4.1 Representation has been received requesting for clarification on whether GST is applicable on the

statutory collections made by the Real Estate Regulatory Authority (RERA).

4.2 RERA is constituted under the Real Estate (Regulation and Development) Act, 2016. RERA

performs function of regulating the real estate development and construction of the building entrusted to

them which fall under Entry No. 1 and 2 of the Twelfth Schedule of the Indian Constitution.

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4.3 RERA is a governmental authority‘ as per the definition in the exemption notification No. 12/2017-

-CT(R) dated 28-06-2017 and is covered under the scope of entry at Sr. No. 4 of notification No. 12/2017-

-CT(R) dated 28-06-2017.

4.4 GST Council in its 53rd meeting has recommended to clarify that statutory collections made by

RERA are covered under the Sl. No. 4 of notification No. 12/2017-CT(R) dated 28-06-2017.

4.5 Thus, as recommended by the 53rd GST Council, it is hereby clarified that statutory collections

made by RERA are covered under the Sl. No. 4 of notification No. 12/2017-CT(R) dated 28-06-2017.

5. Applicability of GST on the incentive amount shared by acquiring banks with other stakeholders in

the digital payment ecosystem under the notified Incentive Scheme for promotion of RuPay Debit Cards

and low value BHIM-UPI transactions.

5.1 Representation has been received requesting for clarification on whether GST is applicable on the

incentive amount shared by acquiring banks with other stakeholders in the digital payment ecosystem

under the notified Incentive Scheme for promotion of RuPay Debit Cards and low value BHIM-UPI

transactions.

5.2 Under the notified Incentive Scheme for promotion of RuPay Debit Cards and low value BHIM-UPI

transactions, the Ministry of Electronics and Information Technology (MeitY) pays the acquiring banks

an incentive as a percentage of the value of the transactions up to two thousand rupees. Applicability of

GST on the incentive paid by the MeitY to acquiring banks under the notified Incentive Scheme for

promotion of RuPay Debit Cards and low value BHIM-UPI transactions was examined in the 48th GST

Council meeting held on 17th December, 2022 and based on the recommendations of the GST Council

meeting, it was clarified by Circular No. 190/02/2023-GST dated 13th January, 2023, that incentives paid

by MeitY to acquiring banks under the said scheme are in the nature of subsidy and thus, not taxable.

5.3 The Gazette Notifications dated 17th December, 2021 and 14th January, 2023 issued by MeitY

state that the incentives will be shared by the acquiring banks with other payment system participants

and the payment system operator, in the proportion and manner decided by the National Payments

Corporation of India (NPCI) in consultation with the participating banks. MeitY pays the incentive to the

acquiring bank and it is further shared by the acquiring bank with the issuer bank. Issuer bank further

shares the incentive with the Payer Payment Service Provider (PSP), which are typically banks, and the

UPI app.

5.4 The share of incentive paid by the acquiring bank to the issuer bank and further shared by the

issuer bank to the Payer PSPs and the UPI app are decided by the NPCI in consultation with

participating banks. Payer PSPs may choose to further share this incentive with Third Party App

Providers (TPAP). However, the proportion of the incentive shared by Payer PSPs with TPAPs is not

being decided by NPCI in consultation with the participating banks for Financial Years 2021-22 and

2022-23 and was determined by the business agreement between the Payer PSPs and TPAP.

5.5 GST Council in its 53rd meeting held on 22nd June, 2024 has recommended to clarify that further

sharing of the incentive amount by the acquiring bank with other stakeholders, up to the point where the

incentive is distributed in the proportion and manner as decided by NPCI in consultation with the

participating banks under the notified Incentive Scheme, is in the nature of a subsidy and thus, not

taxable.

5.6 Thus, as recommended by the 53rd GST Council, it is hereby clarified that further sharing of the

incentive amount by the acquiring bank with other stakeholders, up to the point where the incentive is

distributed in the proportion and manner as decided by NPCI in consultation with the participating

banks under the notified Incentive Scheme for promotion of RuPay Debit Cards and low value BHIM-UPI

transactions, is in the nature of a subsidy and is thus, not taxable.

6. GST liability on the reinsurance of specified general and life insurance schemes.

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6.1 Representations have been received to either exempt or regularize the GST liability, for the period

from 01-07-2017 to 24-01-2018, on reinsurance of specified general insurance and life insurance schemes,

which are exempt from GST.

6.2 Certain specified general insurance and life insurance schemes are exempt from GST under

Sr. Nos. 35 and 36 of notification No. 12/2017-CT(R) dated 28-06-2017. Vide entry at Si. No. 36A of the said

notification, reinsurance of the aforesaid exempted insurance schemes has also been exempted w.e.f. 25-

01-2018.

6.3 GST Council in its 53rd meeting held on 22nd June, 2024 has recommended to regularize the GST

liability on such reinsurance of exempt general insurance and life insurance schemes for the past period,

i.e. from 01-07-2017 to 24-01-2018, on ‗as is where is‘ basis.

6.4 Thus, as recommended by the GST Council, GST liability on the services by way of reinsurance of

the insurance schemes specified in Sr. Nos. 35 and 36 of notification No. 12/2017 CT(R) dated 28-06-2017

is regularized for the period from 01-07-2017 to 24-01-2018 on 'as is where is' basis.

7. GST liability on the reinsurance of insurance schemes for which total premium is paid by the

Government.

7.1 Representations have been received to exempt GST, for the period from 01-07-2017 to 26-07-2018,

on reinsurance of those insurance schemes for which total premium is paid by the Government.

7.2 Services provided to the Central Government, State Government, or Union Territory under any

insurance scheme for which total premium is paid by the Central Government, State Government, or

Union Territory are exempt from GST under Sl. No. 40 of notification No. 12/2017-CT(R) dated 28-06-2017.

Vide entry at Sl. No. 36A of the said notification, re-insurance of the aforesaid insurance schemes has

been prospectively exempted w.e.f. 27-07-2018.

7.3 GST Council in its 53rd meeting held on 22nd June, 2024 has recommended to regularize the GST

liability on such reinsurance of Government sponsored insurance schemes for the past period, i.e. from

01-07-2017 to 26-07-2018, on ‗as is where Is‘ basis.

7.4 Thus, as recommended by the GST Council, GST liability on the services by way of reinsurance of

insurance services covered under Sl. No. 40 of notification No. 12/2017-CT(R) dated 28-06-2017 is

regularized for the period from 01-07-2017 to 26-07-2018 on ‗as is where is‘ basis.

8. Applicability of GST on retrocession services.

8.1 Representations have been received to clarify whether the term ‗reinsurance‘ as mentioned in SI.

No. 36A of notification No. 12/2017-CT(R) dated 28-06-2017 includes 'retrocession‘.

8.2 The matter was placed before the GST Council in its 53rd meeting held on 22nd June, 2024. As per

the IRDAI (Re-insurance) Regulations, 2018, ‗Retrocession‘ means a re-insurance transaction whereby a

part of assumed reinsured risk is further ceded to another Indian Insurer or a CBR (Cross Border

Re-insurer). Accordingly, the GST Council has recommended to clarify that reinsurance includes

retrocession services.

8.3 Thus, as recommended by the GST Council, it is hereby clarified that the term

‗reinsurance‘ as mentioned in Sl. No. 36A of notification No. 12/2017-CT(R) dated 28-06-2017

includes ‗retrocession‘ services.

9. GST liability on certain accommodation services.

9.1 Representations have been received requesting to clarify whether service by way of hostel

accommodation, service apartments/hotels booked for longer period is a service of renting of

residential dwelling for use as residence and exempted under entry at Sl. No. 12 of notification

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No. 12/2017-CTR dated 28-06-2017. Requests have also been received for GST exemption on

hostels for poor and middle-class students run by charitable trusts.

9.2 The matter was placed before the GST Council in its 53rd meeting held on 22nd June, 2024 and

the GST Council recommended to exempt the supply of accommodation services having value of supply

less than or equal to twenty thousand rupees per person per month provided that the accommodation

service is supplied for a minimum continuous period of ninety days. The same has been exempted w.e.f.

15-07-2024 vide notification No. 4/2024-CT(R) dated 12-07-2024.

9.3 In its 53rd meeting, the GST Council further recommended extending the benefit for past

cases provided that value of supply of accommodation services supplied was less than or equal to

twenty thousand rupees per person per month and that the accommodation service was supplied for a

minimum continuous period of ninety days.

9.4 Thus, as recommended by the GST Council, GST liability on the supply of accommodation

services is regularized on ‗as is where is‘ basis for the period from 01-07-2017 to 14-07-2024 where

value of supply of the accommodation service is less than or equal to twenty thousand rupees per

person per month and the said accommodation service was supplied for a minimum continuous

period of ninety days.

10. Difficulties, if any, in the implementation of this circular may be brought to the notice of the Board.

Yours faithfully,

(Limatula Yaden)

Joint Secretary (TRU)

________

No. CCT/26-4/2024-25/G/1629

Subject: Clarification regarding GST rates & classification (goods) based on the recommendations of the

GST Council in its 53rd meeting held on 22nd June, 2024, at New Delhi–reg.

Ref.: Circular No. 229/23/2024-GST dated 15th July, 2024 issued under Central Goods and Services

Tax Act, 2017 by the Tax Research Unit, Department of Revenue, Ministry of Finance,

Government of India, New Delhi.

Circular

(No. 22/2024-25-GST)

The Tax Research Unit, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India, New Delhi has issued the above referred Circular.

For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular

issued by the Tax Research Unit, Central Board of Indirect Taxes and Customs, Department of Revenue,

Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the

Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017).

A copy of the above referred Circular is attached herewith as Annexure.

Difficulty, if any, in implementation of this Circular may please be brought to the notice of the

undersigned.

Given under the seal of this office.

S. S. Gill, IAS, Commissioner of State Taxes, Goa.

Panaji, 30th July, 2024.

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ANNEXURE

Circular No. 229/23/2024-GST

F. No. 190354/94/2024-TO(TRU-II) CBEC

Government of India

Ministry of Finance

Department of Revenue

(Tax Research Unit)

North Block, New Delhi

Date: 15th July, 2024

The Principal Chief Commissioners/Principal Directors General,

The Chief Commissioners/Directors General,

The Principal Commissioners/Commissioners of Central Excise & Central Tax

Subject: Clarification regarding GST rates & classification (goods) based on the recommendations of the

GST Council in its 53rd meeting held on 22nd June, 2024, at New Delhi-reg.

Madam/Sir,

Based on the recommendations of the GST Council in its 53rd meeting held on 22nd June, 2024, at

New Delhi, in exercise of the powers conferred under section 168(1) of the Central Goods and Services

Tax Act, 2017, clarifications on the following issues are being issued through this Circular as under:

2. Clarification regarding GST rate on Solar Cookers:

2.1 Representations have been received seeking clarification regarding appropriate classification and

applicable GST rate on supply of solar cookers that work on dual energy source.

2.2 On the recommendations of GST Council, it is hereby clarified that solar cookers that work on dual

energy of solar energy and grid electricity are appropriately classifiable under heading 8516 and already

attract a GST rate of 12% vide Sl. No. 201A of Schedule II of notification No. 1/2017-Central Tax (Rate)

dated the 28th June, 2017.

3. Clarification regarding GST rate on Tire Water Sprinklers:

3.1 Representations have been received seeking clarification as to whether the existing entry covering

sprinkles at 12% GST rate also cover Fire Water Sprinklers.

3.2 On the recommendations of the Council, it is hereby clarified that all types of sprinklers, including

fire water sprinklers attract GST at the rate of 12% vide Sr. No. 195 B of Schedule II of notification

No. 1/2017-Central Tax (Rate) dated the 28th June, 2017.

3.3 Further, on the basis of the recommendation of the GST Council, in view of the prevailing genuine

doubts, the issues for the past period are regularized on ―as is where is basis‖.

4. Clarification regarding GST rate on parts of Poultry-keeping machinery:

4.1 Representations have been received seeking clarification regarding appropriate classification and

applicable GST rate on supply of ‗parts‘ of Poultry-keeping machinery.

4.2 Parts of Poultry-keeping machinery are classifiable under tariff item 8436 91 00 and attract GST at

the rate of 12% vide Sl. No. 199 of Schedule II of notification No. 1/2017-Central Tax (Rate), dated the 28th

June, 2017. On the recommendations of the Council, to bring clarity on the issue, the relevant entry at

Sl. No. 199 of Schedule II of notification No. 1/2017-Central Tax (Rate) dated the 28^th June, 2017, has been

amended vide notification No. 2/2024-Central Tax (Rate), dated the 12th July, 2024 to specifically include

‗parts‘ of Poultry-keeping machinery.

4.3 Further, on the basis of the recommendation of the GST Council, in view of the prevailing genuine

doubts, the issues for the past period are regularized on ―as is where is basis‖.

5. Clarification regarding the scope of expression ‗pre-packaged and labelled‘ for supply of

agricultural farm produce:

OFFICIAL GAZETTE — GOVT. OF GOA

SERIES II No. 17

(EXTRAORDINARY No. 2)

30TH JULY, 2024

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5.1 Representations have been received seeking clarification regarding the scope of expression ‗pre-

packaged and labelled‘ for the purposes of levy of GST on supply of agricultural farm produce in view of

amendment made in Legal Metrology (Packaged Commodities) Rules, 2011.

5.2 On the basis of the recommendation of the GST Council, the definition of ‗pre-packaged and

labeled‘ in notification No. 1/2017-Central Tax (Rate) and notification No. 2/2017-Central Tax (Rate), both

dated the 28th June, 2017, has been amended vide notification No. 2/2024-Central Tax (Rate) dated 12th

July, 2024 and notification No. 3/2024-Central Tax (Rate) dated 12th July, 2024, respectively, to exclude

the supply of agricultural farm produce in package(s) of commodities containing quantity of more than

25 kilogram or 25 litre from the scope of ‗pre-packaged and labelled‘. Consequently, supply of agricultural

farm produce in package(s) containing quantity of more than 25 kilogram or 25 litre will not attract GST

levy of 5%.

5.3 Further, on the basis of the recommendation of the GST Council, in view of the prevailing genuine

doubts, the issues for the past period are hereby regularized on ―as is where is‖ basis.

6. Clarification regarding supplies of goods made to or by agency engaged by Government:

6.1 Prior to 17th July, 2022, supplies of pulses and cereals attracted GST at rate of 5%, wherein the said

goods were put up in a unit container and bearing a registered brand name and/or bearing a brand name

on which an actionable claim or enforceable right in a court of law is available.

6.2 On the basis of the recommendation of the GST Council, in view of the genuine interpretational

issues, the issues for the past period from 01-07-2017 up to 17-07-2022 are hereby regularized on ―as is

where is‖ basis for supplies made to or by any agency engaged by Union Government or State

Government/Union Territory for procurement and sale of such goods under any programme/scheme duly

approved by the Central Government or any State Government intended to distribute such goods at free

of cost or at subsidized rate to the eligible beneficiaries like economically weaker sections of the society

subject to following conditions, namely:-

a. the concerned supplier furnishes a certificate from an officer not below the rank of the Deputy

Secretary to the Government of India or the Deputy Secretary to the State Government or the

Deputy Secretary in the Union Territory concerned recommending that supplies have been made

to or by an agency engaged by Union Government or State Government/Union Territory for

procurement and sale of such goods under any programme/scheme duly approved by the Central

Government or any State Government intended to distribute such goods at free of cost or at

subsidized rate to the eligible beneficiaries like economically weaker sections of the society,

within a period of 180 days from the date of issuance of this Circular to the jurisdictional

commissioner of the Central Tax or jurisdictional commissioner of the State Tax, or jurisdictional

officer of the Union Territory Tax, as the case maybe; and

b. Input Tax Credit shall not be allowed on such inputs and, if availed on such inputs, it shall be

reversed within a period of 180 days from the date of issuance of this Circular, if the supplier

intends to take the benefit under the proposed regularisation.

7. Difficulty, if any, in the implementation of this circular may be brought to the notice of the Board.

Yours faithfully,

(Limatula Yaden)

Joint Secretary (TRU)

Tel: 011-2309 2687

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