GST WEEKLY UPDATE : 12/2021-22 (20.06.2021)
1. GST Amendments Has Been Notified:
1. Circular No. 149/05/2021) GST on supply of food in Anganwadis and Schools:-
As per recommendation of the GST Council, it is clarified that services provided to an educational institution by way of serving of food ( catering including mid- day meals) is exempt from levy of GST irrespective of its funding from government grants or corporate donations [under said entry 66 (b)(ii)]. Educational institutions as defined in the notification include aganwadi. Hence, serving of food to anganwadi shall also be covered by said exemption, whether sponsored by government or through donation from corporates.
2. Circular No.150/06/2021) GST on the activity of construction of road where considerations are received in deferred payment (annuity):-
As recommended by the GST Council, it is hereby clarified that Entry 23A of notification No. 12/2017-CT(R) does not exempt GST on the annuity (deferred payments) paid for construction of roads.
3. Circular No. 151/07/2021) GST on supply of various services by Central and State Board (such as National Board of Examination):-
4. Circular No. 152/08/2021) GST Rate applicable on construction services provided to a Government Entity, in relation to construction such as of a Ropeway on turnkey basis:-
Works contract service provided by way of construction such as of rope way shall fall under entry at sl. No. 3(xii) of notification 11/2017-(CTR) and attract GST at the rate of 18%.
5. Circular No. 153/09/2021 ) GST on milling of wheat into flour or paddy into rice for distribution by State Governments under PDS:-
Public Distribution specifically figures at entry 28 of the 11th Schedule to the constitution, which lists the activities that may be entrusted to a Panchayat under Article 243G of the Constitution. Hence, said entry No. 3A would apply to composite supply of milling of wheat and fortification thereof by miller, or of paddy into rice, provided that value of goods supplied in such composite supply (goods used for fortification, packing material etc) does not exceed 25% of the value of composite supply. It is a matter of fact as to whether the value of goods in such composite supply is up to 25% and requires ascertainment on case-to-case basis.
In case the supply of service by way of milling of wheat into flour or of paddy into rice, is not eligible for exemption under Sl. No. 3 A of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 for the reason that value of goods supply in such a composite supply exceeds 25%, then the applicable GST rate would be 5% if such composite supply is provided to a registered person, being a job work service (entry No. 26 of notification No. 11/2017- Central Tax (Rate) dated 28.06.2017). Combined reading of the definition of job-work [section 2(68), 2(94), 22, 24, 25 and section 51] makes it clear that a person registered only for the purpose of deduction of tax under section 51 of the CGST Act is also a registered person for the purposes of the said entry No. 26, and thus said supply to such person is also entitled for 5% rate.
6. Circular No.154/10/2021 ) GST on service supplied by State Govt. to their undertakings or PSUs by way of guaranteeing loans taken by them:-
As recommended by the Council, it is re-iterated that guaranteeing of loans by Central or State Government for their undertaking or PSU is specifically exempt under said entry No. 34A.
7. Circular No. 155/11/2021) Clarification regarding GST rate on laterals/parts of Sprinklers or Drip Irrigation System:-
laterals/parts to be used solely or principally with sprinklers or drip irrigation system, which are classifiable under heading 8424, would attract a GST of 12%, even if supplied separately. However, any part of general use, which gets classified in a heading other than 8424, in terms of Section Note and Chapter Notes to HSN, shall attract GST as applicable to the respective heading.
2. Extention of Validity For MSMEs:
Ministry of Micro, Small and Medium Enterprises Extends Validity of Udyog Aadhaar Memorandum from 31st March, 2021 to 31st December, 2021.
3. Late Filing Fee For GSTR-1:
Late Filing Fee for GSTR 1 is applicable from June, 2021 vide Notification No. 20/2021 – Central Tax dated 01.06.2021
For NIL Return - RS.500
TURNOVER IN PREVIOUS YEAR UPTO 1.5 CR - RS.2000
1.5 CR TO 5 CR - RS.5000
4. Recent AAR & Judicial Decisions:-
i. Hon’ble Gujarat High Court Decision Regarding GST authorities to grant refund of IGST paid on ocean freight beyond period limitation provided:
(Applicant - Comsol Energyprivate Limited)
The Hon’ble High Court, Gujarat in M/S Comsol Energy Private Limited v. State of Gujarat [R/Special Civil Application No. 11905 of 2020 decided on December 21, 2020] allowed the refund claim of Integrated Goods and Service Tax (IGST) paid on ocean freight under the reverse charge mechanism (RCM) beyond the statutory time limit prescribed under Section 54 of the Central Good and Service Tax Act, 2017 (the CGST Act). Held that, the amount collected without authority of law cannot be considered as tax collected and therefore, Section 54 of the CGST Act shall not be applicable. Further, noted that the refund claim was within the time limit prescribed under the Limitation Act, 1963 (the Limitation Act).
ii. AAR On ‘Track assembly’ is an accessory to Motor vehicle – 28% GST Payable:
(Applicant - Daebu Automotive Seat India Private Limited)
The product ‘Track Assembly’ manufactured and supplied by M/s. Daebu Automotive India Private Limited, is classifiable under CTH 8708 of the First Schedule to the Customs Tariff Act, 1975 as applicable to GST as per Explanation (iii) to Notification 1/2017-Central Tax (Rate) dt 28.06.2017 and G.O. Ms No. 59, Commercial Taxes and Registration (B1) dt 29th June 2017.
The applicable rate of tax is CGST @ 14% as per entry Sl.No.170 of Schedule -IV of the Notification 1/2017-Central Tax (Rate) dt 28.06.2017 as amended and SGST @14% as per entry sl. No. 170 of Schedule-IV of Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 as amended.
iii. AAR On GST on construction of Residential Real Estate Project other than affordable residential apartments’:
(Applicant - Ashiana Housing Limited)
The Proposed Modus operandi for construction of ‘Unit’ which is ‘other than affordable residential apartments’ by the applicant in the RREP promoted by them, namely, Ashiana Shubam -Phase IV’ in Maraimalai Nagar Chennai is classifiable under SAC 9954 as ‘Construction Service’ and the applicable rate of tax is CGST @ 3.75% and SGST @ 3.75% as per Entry SI.No. 3(ia) of the Notification 11/2017-Central Tax (Rate) dt 28.06.2017 as amended.
iv. AAR On 12% GST On Service Of Operating Mini AC Buses:
(Applicant - M P Enterprises & Associates Limited)
The service of operating mini AC buses by the applicant for Brihan Mumbai Electricity Supply Transport Undertaking (BEST) would not be exempt from payment of GST under Tariff Heading 9966 i.e. ‘services by way of giving on hire to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers’ in terms of Notification No. 12/2017- CT(R) dated 28.06.2017.
The service of operating mini AC buses by the applicant for BEST would be subject to GST @12% under Tariff Heading 9966 i.e. ‘renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient’ inserted by way of Notification No.31/2017 dated 13.10.2017 (Amended Notification No. 11/2017-CT(R) dated 28.06.2017)
The service of operating mini AC buses by the applicant for BEST would be subject to GST @18% under Tariff Heading 9966 i.e. ‘rental service of transport vehicles with or without operators’ under Notification No. 11/2017-CT(R) dated 28.06.2017.
The author of Above Article is CA Vipul Khandhar. He can be reached at firstname.lastname@example.org.
Author's Disclaimer: This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.