The Government of West Bengal on September 11th 2024 issued clarifications regarding the applicability of GST on certain services. This circular follows the recommendations made during the 53rd GST Council meeting held on June 22, 2024.
1. GST Exemption for Ministry of Railways Services
The Ministry of Railways (Indian Railways) faced a shift in GST obligations as of October 20, 2023, when its supplies were brought under the Forward Charge Mechanism. This move, aimed at standardizing GST treatment, initially led to the withdrawal of several exemptions.
New Update:
- Exemptions Granted: Following representations about implementation difficulties, the GST Council has now recommended that GST be exempted on specific services including:
- Sale of platform tickets
- Retiring rooms and waiting rooms
- Cloak room services
- Battery-operated car services
- Inter-zone/division services within Indian Railways
Retroactive Relief: GST for these services will be regularized for the period from October 20, 2023, to July 14, 2024, on an ‘as is where is’ basis.
2. Special Purpose Vehicles (SPVs) and GST Exemption
Previously, transactions between SPVs and the Ministry of Railways for infrastructure use were subject to GST. This led to implementation challenges.
New Update:
- Exemptions Granted: The GST Council has recommended that:
- Services provided by SPVs to Indian Railways, which involve using infrastructure during the concession period, and
- Maintenance services provided by Indian Railways to SPVs
Both these services are now exempt from GST.
Retroactive Relief: Exemption applies from July 1, 2017, to July 14, 2024, on an ‘as is where is’ basis.
3. Statutory Collections by RERA
Queries about GST on statutory collections by the Real Estate Regulatory Authority (RERA) have been clarified.
New Update:
- Exemption Confirmed: Statutory collections by RERA are exempt from GST, in line with Entry No. 4 of Notification No. 1136-F.T. dated June 28, 2017.
4. Incentive Amounts in Digital Payments
There has been confusion about the GST applicability on incentives shared by acquiring banks in the digital payment ecosystem.
New Update:
- Subsidy Status: The GST Council clarified that the further distribution of incentives, up to the point where they are divided as per NPCI guidelines, is considered a subsidy and is therefore not taxable.
5. Reinsurance of Exempt Insurance Schemes
Clarifications were requested regarding GST on the reinsurance of certain exempted general and life insurance schemes.
New Update:
- Retroactive Regularization: GST liability on reinsurance for these exempt insurance schemes is now regularized for the period from July 1, 2017, to January 24, 2018, on an ‘as is where is’ basis.
6. Reinsurance of Government-Paid Insurance Schemes
There were requests to exempt GST on reinsurance for insurance schemes where the total premium is paid by the Government.
New Update:
- Retroactive Regularization: GST liability for reinsurance of these government-sponsored schemes is regularized for the period from July 1, 2017, to July 26, 2018.
7. Retrocession Services
The term ‘reinsurance’ was questioned whether it includes ‘retrocession’ services for GST purposes.
New Update:
- Inclusion Confirmed: The GST Council has clarified that ‘reinsurance’ includes ‘retrocession’ services according to the IRDAI (Re-insurance) Regulations, 2018.
8. Accommodation Services
There were requests for clarification on GST for services like hostel accommodations and service apartments.
New Update:
- Exemption Details: Accommodation services valued at ₹20,000 or less per person per month and provided for a minimum continuous period of 90 days are exempt from GST. This exemption is effective from July 15, 2024, and is also retroactively applied from July 1, 2017, to July 14, 2024.
