GST News Letter 10-Jan-2018

GOODS & SERVICES TAX  UPDATE 

Clarifications regarding Levy of GST on Accomodation services, betting and gamblling in casinos ,horse racing,admission to cinema, homestays, printing,legal services etc.

The Central Government vide Circular no. 27/01/2018-GST dated 4th January, 2018 has clarified certain issues regarding levy of GST on supply of services which are as follows:

S. no.

Questions/clarifications sought

Clarifications

1.

  1. Will GST be charged on actual tariff or declared tariff for accommodation services? and what if cost goes up (more than declared tariff) owing to additional bed

Declared or published tariff is relevant only for determination of the tax rate slab. GST will be payable on the actual amount charged (transaction value). For example, if the declared tariff is Rs. 7000 per unit per day but the amount charged from the customer on account of extra bed is Rs. 8000, GST shall be charged at 18% on Rs. 8000

  1. Where will the declared tariff be published?

Tariff declared anywhere, say on the websites through which business is being procured or printed on tariff card or displayed at the reception will be the declared tariff. In case different tariff is declared at different places, highest of such declared tariffs shall be the declared tariff for the purpose of levy of GST

  1. Same room may have different tariff at different times depending on season or flow of tourists as per dynamic pricing. Which rate to be used then?

In case different tariff is declared for different seasons or periods of the year, the tariff declared for the season in which the service of accommodation is provided shall apply.

  1. If tariff changes between booking and actual usage, which rate will be used?

Declared tariff at the time of supply would apply.

  1. GST at what rate would be levied if an upgrade is provided to the customer at a lower rate?

If declared tariff of the accommodation provided by way of upgrade is Rs 10000, but amount charged is Rs 7000, then GST would be levied @ 28% on Rs 7000/-.

2.

Vide notification No. 11/2017-Central Tax (Rate) dated the 28th June 2017 entry 34, GST on the service of admission into casino under Heading 9996 (Recreational, cultural and sporting services) has been levied @ 28%. Since the Value of supply rule has not specified the method of determining taxable amount in casino, Casino Operators have been informed to collect 28% GST on gross amount collected as admission charge or entry fee. The method of levy adopted needs to be clarified

“Heading 9996 (Recreational, cultural and sporting services) – …

(iii) Services by way of admission to entertainment events or access to amusement facilities including exhibition of cinematograph films, theme parks, water parks, joy rides, merry-go rounds, gocarting, casinos, race-course, ballet, any sporting event such as Indian Premier League and the like. – 14%

(v) Gambling. – 14 %”

As is evident from the notification, “entry to casinos” and “gambling” are two different services, and GST is leviable at 28% on both these services (14% CGST and 14% SGST) on the value determined as per section 15 of the CGST Act. Thus, GST @ 28% would apply on entry to casinos as well as on betting/ gambling services being provided by casinos on the transaction value of betting, i.e. the total bet value, in addition to GST levy on any other services being provided by the casinos (such as services by way of supply of food/ drinks etc. at the casinos). Betting, in pre-GST regime, was subjected to betting tax on full bet value

3.

The provision in rate schedule notification No. 11/2017-Central Tax (Rate) dated the 28th June 2017 does not clearly state the tax base to levy GST on horse racing. This may be clarified.

GST would be leviable on the entire bet value i.e. total of face value of any or all bets paid into the totalisator or placed with licensed book makers, as the case may be. Illustration: If entire bet value is Rs. 100, GST leviable will be Rs. 28/

4.

1. Whether for the purpose of entries at Sl. Nos. 34(ii) [admission to cinema] and 7(ii)(vi)(viii) [Accommodation in hotels, inns, etc.], of notification 11/2017-CT (Rate) dated 28th June 2017, price/ declared tariff includes the tax component or not?

Price/ declared tariff does not include taxes.

2. Whether rent on rooms provided to in-patients is exempted? If liable to tax, please mention the entry of CGST Notification 11/2017- CT(Rate)

Room rent in hospitals is exempt.

3. What will be the rate of tax for bakery items supplied where eating place is attached – manufacturer for the purpose of composition levy?

Any service by way of serving of food or drinks including by a bakery qualifies under section 10 (1) (b) of CGST Act and hence GST rate of composition levy for the same would be 5%

5.

Whether homestays providing accommodation through an Electronic Commerce Operator, below threshold limit are exempt from taking registration?

Notification No. 17/2017-Central Tax (Rate), has been issued making ECOs liable for payment of GST in case of accommodation services provided in hotels, inns guest houses or other commercial places meant for residential or lodging purposes provided by a person having turnover below Rs. 20 lakhs (Rs. 10 lakhs in special category states) per annum and thus not required to take registration under section 22(1) of CGST Act. Such persons, even though they provide services through ECO, are not required to take registration in view of section 24(ix) of CGST Act, 2017.

6.

To clarify whether supply in the situations listed below shall be treated as a supply of goods or supply of service: -1. The books are printed/ published/ sold on procuring copyright from the author or his legal heir. [e.g. White Tiger Procures copyright from Ruskin Bond] 2. The books are printed/ published/ sold against a specific brand name. [e.g. Manorama Year Book] 3. The books are printed/ published/ sold on paying copyright fees to a foreign publisher for publishing Indian edition (same language) of foreign books. [e.g. Penguin (India) Ltd. pays fees to Routledge (London)] The books are printed/ published/ sold on paying copyright fees to a foreign publisher for publishing Indian language edition (translated). [e.g. Ananda Publishers Ltd. pays fees to Penguin (NY)]

The supply of books shall be treated as supply of goods as long as the supplier owns the books and has the legal rights to sell those books on his own account.

7.

Whether legal services other than representational services provided by an individual advocate or a senior advocate to a business entity are liable for GST under reverse charge mechanism?

Yes. In case of legal services including representational services provided by an advocate including a senior advocate to a business entity, GST is required to be paid by the recipient of the service under reverse charge mechanism, i.e. the business entity.

[Circular no. 27/01/2018-GST dated 4th January, 2018]

Reverse Charge Mechanism on Goods and Services under GST

Generally, the supplier of goods or services is liable to pay GST. However, in specified cases like imports and other notified supplies, the liability may be cast on the recipient under the reverse charge mechanism. Reverse Charge means the liability to pay tax is on the recipient of supply of goods or services instead of the supplier of such goods or services in respect of notified categories of supply.

How To Treat Advance Received In GSTR-1

Where against an advance the invoice is issued in the same tax period, the advance need not be shown separately in Form GSTR-1 but the specified details of invoice itself can be directly uploaded on the system.

Zero Rating of Supplies in GST

As per section 2(47) of the CGST Act, 2017, a supply is said to be exempt, when it attracts nil rate of duty or is specifically exempted by a notification or kept out of the purview of tax (i.e. a non-GST supply). But if a good or service is exempted from payment of tax, it cannot be said that it is zero rated.

FAQs on FORM GST ITC 04

1. What are the features of FORM GST ITC 04 Offline Utility?

The Key Features of FORM GST ITC 04 Offline Utility are:
The ITC-04 details can be prepared offline with no connection to Internet.
Most of the data entry and business validations are in built in the offline tool reducing errors upon upload to GST Portal.

GST on Transport & Logistics services- Answer to 19 FAQs

Q 1. I am a single truck owner-operator and I ply my truck mostly between States, carrying the goods booked for my truck by an agent; aggregate value of service which I provided exceeded twenty lakh rupees during last year. Am I supposed to take registration?

Ans. You are not liable to registration, as services provided by way of transportation of goods by road are exempt. Please refer to Notification no. 12/2017-Central Tax (Rate), dated 28th June, 2017

FREQUENTLY ASKED QUESTIONS (FAQS) ON E-WAY BILL

1. What is an e-way bill?

e-way bill is a document required to be carried by a person in charge of the conveyance carrying any consignment of goods of value exceeding fifty thousand rupees as mandated by the Government in terms of section 68 of the Goods and Services Tax Act read with rule 138 of the rules framed thereunder. It is generated from the GST Common Portal by the registered persons or transporters who causes movement of goods of consignment before commencement of such movement

Clarifications regarding levy of GST on accommodation services, betting and gambling in casinos, horse racing, admission to cinema, homestays, printing, legal services etc.

Subject: Clarifications regarding levy of GST on accommodation services, betting and gambling in casinos, horse racing, admission to cinema, homestays, printing, legal services etc. – Reg.

Representations were received from trade and industry for clarification on certain issues regarding levy of GST on supply of services.

2. In this context, it is stated that the following clarifications, inter-alia, were publishedas FAQ at http://www.cbec.gov.in/resources//htdocs-cbec/gst/om-clarification.pdf.

GST News 07.01.2018 by CA Satbir Singh I TaxHeal.com
TaxHeal Mobile App Download : https://drive.google.com/open?id=0BwJRm9ZW3A3nLUVmTzd6cnlNR0k Subscribe Taxheal by Email : https://feedburner.google.com/fb/a/m…

 

GST – Series of Live Webcastsby Indirect Taxes Committee in January 2017

GST should be in place by 1st July 2017. Professionals need to be ready to start assisting their clients now as many decisions have to be made in pre-GST period. ICAI is observing January 2017 as the GST month with plans to roll out a series of publications FAQs, revised law BGM and organising many 2/3/8 day GST understanding seminars/ workshops. To support those who attend (refresher) and those unable to attend a series of Live Webcasts to comprehensively cover GST for its members, revenue officers and stakeholders at large. The complete schedule with links, PPTs and YouTube Links of the webcasts is provided as below:

 

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