CBIC issued clarification on scope of support services to exploration, mining or drilling of petroleum crude or natural gas or both.

No Comments

Background:

The activities associated with exploration, mining or drilling of petroleum crude or natural gas fall under heading 9986. A few services particularly technical and consulting services relating to exploration also fall under heading 9983. Therefore, following entry has been inserted under heading 9983 with effect from October 01, 2019 vide Notification No. 20/2019- Central Tax(Rate) dated September 30, 2019.

“Other professional, technical and business services relating to exploration, mining or drilling of petroleum crude or natural gas or both”.

Issue:

The entry “services of exploration, mining or drilling of petroleum crude or natural gas or both” at Sr. No. 24 (ii) of heading 9986 in Notification No. 11/2017- Central Tax (Rate) dated June 28, 2017.

Clarification:

The CBIC vide Circular No. 114/33/2019- GST dated October 11, 2019, has clarified as under:

  • The scope of the entry at Sr. 24 (ii) under heading 9986 of Notification No. 11/2017- Central Tax (Rate) dated June 28, 2017 shall be governed by the explanatory notes to service codes 998621 and 998622 of the Scheme of Classification of Services.
  • It is further clarified that the scope of the entry at Sr. No. 21 (ia) under heading 9983 of Notification No. 11/2017- Central Tax (Rate) dated June 28, 2017 inserted w.e.f. October 01, 2019 vide Notification No. 20/2019- CT(R) dated September 30, 2019, shall be governed by the explanatory notes to service codes 998341 and 998343 of the Scheme of Classification of Services.
  • The services which do not fall under the said entries under heading 9983 and 9986 of the said notification shall be classified in their respective headings and taxed accordingly.