The Central Board of Indirect Taxes and Customs on 3rd August 2022, has issued clarifications regarding applicable GST rates & exemptions on 16 services. CBIC received representation seeking clarification on the various issues, including the GST rate of ice-cream, GST on storage or warehousing of cotton in baled or ginned form and conservancy services supplied to the army etc.
The clarifications as recommended by the GST Council are below:
- The Board has clarified that past cases of payment of GST on supply of ice-cream by ice-cream parlors @ 5% without ITC shall be treated as fully GST paid to avoid unnecessary litigation. Since the decision is only to regularize the past practice, no refund of GST shall be allowed, if already paid at 18%. With effect from 6.10.2021, the ice Cream parlors are required to pay GST on supply of ice-cream at the rate of 18% with ITC.
- Representations have been received regarding applicability of GST on application fee charged for entrance or the fee charged for issuance of eligibility certificates for admission or for issuance of migration certificate by educational institutions. In this regard, it is stated that educational services supplied by educational institutions to its students are exempt from GSTvide entry 66 of the notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 relevant portion of which reads as under:
Services provided by an educational institution to its students, faculty, and staff;
(aa) by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee.
Therefore, it can be seen that all services supplied by an ‘educational institution’ to its students are exempt from GST. Consideration charged by the educational institutes by way of entrance fee for conduct of entrance examination is also exempt. The exemption is wide enough to cover the amount or fee charged for admission or entrance, or amount charged for application fee for entrance, or the fee charged from prospective students for issuance of eligibility certificate to them in the process of their entrance/admission to the educational institution. Services supplied by an educational institution by way of issuance of migration certificate to the leaving or ex-students are also covered by the exemption. Accordingly, such activities of educational institution are also exempt.
3. As recommended by the GST Council, it is clarified sale of space for advertisement in souvenir book is covered under serial number (i) of entry 21 of Notification No. 11/2017-Central Tax (Rate) and attracts GST @ 5%
4. it is clarified that location charges or preferential location charges (PLC) paid upfront in addition to the lease premium for long term lease of land constitute part of upfront amount charged for long term lease of land and are eligible for the same tax treatment, and thus eligible for exemption.
5. Further It is clarified that the supply of all goods & services are taxable unless exempt or declared as neither a supply of goods nor a supply of service’. Services provided by the guest anchors in lieu of honorarium attract GST liability. However, guest anchors whose aggregate turnover in a financial year does not exceed Rs 20 lakhs (Rs 10 lakhs in case of special category states) shall not be liable to take registration and pay GST.
