Amendment in exemption provided for the supply of various services

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The central Government vide Notification no. 2/2018-Central Tax (Rate) dated January 25, 2018 has amended Notification no. 12/2017-Central Tax (Rate) dated June 28, 2017 as under:

  1. Pure services provided to government entity: against serial number 3, in the entry in column (3), after the words “a Governmental Authority” the words “or a Government Entity” has been inserted. Now the entry read as:

“Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution.”

  1. Composite supply where value of goods supplied < 25% : after serial number 3 and the entries relating thereto, the following serial number and entries has been inserted, namely: –

3A        “Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent of the value of the said composite supply provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution.”

  1. Services to the Central Government, by way of transport of passengers with or without accompanied belongings, by air, embarking from or terminating at a regional connectivity scheme airport, against consideration in the form of viability gap funding. The exemption has been increased for the period of three years from one year: against serial number 16, in the entry in column (3), for the words “one year”, the words “three years” has been substituted;

“Services provided to the Central Government, by way of transport of passengers with or without accompanied belongings, by air, embarking from or terminating at a regional connectivity scheme airport, against consideration in the form of viability gap funding:

Provided that nothing contained in this entry shall apply on or after the expiry of a period of three years from the date of commencement of operations of the regional connectivity scheme airport as notified by the Ministry of Civil Aviation.”

  1. Transportation of goods from custom station to a place outside station: after serial number 19 and the entries relating thereto, the following serial number and entries has been inserted, namely:
S. no. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate Condition
(1) (2) (3) (4) (5)
“19A Heading 9965 Services by way of transportation of goods by an aircraft from customs station of clearance in India to a place outside India. NIL Nothing contained in this serial number shall apply after the 30th day of September
19B Heading 9965 Services by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India. NIL

  1. Services in relation to giving on hire, motor vehicle for transport of students, faculty and staff, to a person providing services of transportation to educational institutions: against serial number 22, in the entry in column (3), after item (b), the following item has been inserted, namely:

“(c) motor vehicle for transport of students, faculty and staff, to a person providing services of transportation of students, faculty and staff to an educational institution providing services by way of pre-school education and education upto higher secondary school or equivalent.”

  1. Services of life insurance provided or agreed to be provided by the Naval Group Insurance Fund: after serial number 29 and the entries relating thereto, the following serial number and entries has been inserted, namely:
S. no. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate Condition
(1) (2) (3) (4) (5)
29A Heading 9971 or Heading 9991 Services of life insurance provided or agreed to be provided by the Naval Group Insurance Fund to the personnel of Coast Guard under the Group Insurance Schemes of the Central Government. NIL

  1. Against serial number 36, in the entry in column (3), in item (c), for the words “fifty thousand”, the words “two lakhs” has been substituted;

Services of life insurance business provided under “life micro-insurance product as approved by the Insurance Regulatory and Development Authority” schemes, having maximum amount of cover of two lakhs rupees has been made exempt. Earlier the limit was fifty thousand rupees.

  1. Reinsurance of the insurance schemes specified in serial number 35 or 36: after serial number 36 and the entries relating thereto, the following serial number and entries has been inserted, namely:
S. no. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate Condition
(1) (2) (3) (4) (5)
36A Heading 9971 or  Heading 9991 Services by way of reinsurance of the insurance schemes specified in serial number 35 or 36. NIL

  1. Services by an intermediary of financial services: after serial number 39 and the entries relating thereto, the following serial number and entries has been inserted, namely:
S. no. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate Condition
(1) (2) (3) (4) (5)
39A Heading 9971 Services by an intermediary of financial services located in a multi services SEZ with International Financial Services Centre (IFSC) status to a customer located outside India for international financial services in currencies other than Indian rupees (INR).

 

Explanation.- For the purposes of this entry, the intermediary of financial services in IFSC is a person,-

 

i.            who is permitted or recognised as such by the Government of India or any Regulator appointed for regulation of IFSC; or

ii.            who is treated as a person resident outside India under the Foreign Exchange Management (International Financial Services Centre) Regulations, 2015; or

iii.            who is registered under the Insurance Regulatory and Development Authority of India (International Financial Service Centre) Guidelines, 2015 as IFSC Insurance Office; or

iv.            who is permitted as such by Securities and Exchange Board of India (SEBI) under the Securities and Exchange Board of India (International Financial Services Centres) Guidelines, 2015.

NIL

  1. Against serial number 45, in the entry in column (3) amendment has been made

Services provided by –

  • an arbitral tribunal
  • a partnership firm of advocates or an individual as an advocate other than a senior advocate, by way of legal services
  • a senior advocate by way of legal services

to the Central Government, State Government, Union Territory, Local Authority, Governmental Authority or Government Entity has been exempted.

  1. Services by way of fumigation in a warehouse of agricultural produce: after serial number 53 and the entries relating thereto, the following entry has been inserted, namely;
S. no. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate Condition
(1) (2) (3) (4) (5)
53A Heading 9985 Services by way of fumigation in a warehouse of agricultural produce Nil Nil

  1. Services by way of fumigation in a warehouse of agricultural produce: against serial number 54, in the entry in column (3), after item (g), the following item has been inserted, namely:-

“(h) services by way of fumigation in a warehouse of agricultural produce.”

  1. Against serial number 60, in the entry in column (3), the words “the Ministry of External Affairs,” have been omitted. The new entry read as:

“Services by a specified organisation in respect of a religious pilgrimage facilitated by [***] the Government of India, under bilateral arrangement.”

  1. Providing information under the Right to Information Act, 2005: after serial number 65 and the entries relating thereto, the following serial number and entries shall be inserted, namely:
S. no. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate Condition
(1) (2) (3) (4) (5)
65A Heading 9991 Services by way of providing information under the Right to Information Act, 2005 (22 of 2005). NIL NIL
  1. Further exemption to educational institution: Following amendments have been made in S. No. 66 as under:
  • After item (a), the item (aa) has been inserted which is as follows:

(aa) Services provided by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee.

  • In item (b), the sub item (iv) has been changed the words “upto higher secondary” has been omitted:

Now read as “services provided to an educational institution, by way of services relating to admission to, or conduct of examination by, such institution.” Earlier it was read as “…… conduct of examination by, such institution upto higher secondary.”

  • After sub item (iv) of item (b), the following sub item has been inserted, Services provided to an educational institution, by way of-

“(v)      supply of online educational journals or periodicals”

  • In the first proviso, for the word, brackets and letter “entry (b)”, the words, brackets and letters “sub-items (i), (ii) and (iii) of item (b)” has been substituted to mean that, services provided to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent are exempt except, “ (iv) by way of services relating to admission to, or conduct of examination by, such institution.”

  • After first proviso, the second proviso has been inserted as “Provided further that nothing contained in sub-item (v) of item (b) shall apply to an institution providing services by way of,-

(i). pre-school education and education up to higher secondary school or equivalent; or

(ii). education as a part of an approved vocational education course.”

  1. Service by an unincorporated body or a non-profit entity up to an amount of seven thousand five hundred rupees per month per member: against serial number 77, in the entry in column (3), in item (c), for the words “five thousand”, the words “seven thousand five hundred” has been substituted.
  2. against serial number 81, for the entry in column (3), the following entry has been substituted, namely:

“Services by way of right to admission to- 

  • circus, dance, or theatrical performance including drama or ballet; 
  • award function, concert, pageant, musical performance or any sporting event other than a recognised sporting event; 
  • recognised sporting event; 
  • planetarium, where the consideration for right to admission to the events or places as referred to in items (a), (b), (c) or (d) above is not more than ₹ 500 per person.”

Read more at: http://www.cbec.gov.in/htdocs-cbec/gst/notfctn-02-2018-cgst-rate-english.pdf