LIVE WEBCAST ORGANISED BY INDIRECT TAXES COMMITTEE OF ICAI EXEMPTIONS UNDER GST. Presented by CA. Hanish S Indirect Taxes Committee, ICAI

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1 1 LIVE WEBCAST ORGANISED BY INDIRECT TAXES COMMITTEE OF ICAI EXEMPTIONS UNDER GST Presented by CA. Hanish S

2 Identification of Exemption Notification 2 Supplier Specific Services by the Reserve Bank of India Services by a foreign diplomatic mission located in India Supply Specific Services by way of renting of residential dwelling for use as residence

3 Optional or Mandatory 3 Restaurant 5% w/o input tax credit GTA 5% w/o input tax credit and 12% with tax credit Thenceforth be liable to pay tax at 12% Exempt Generally Either absolutely Or subject to such conditions as may be specified Explanation under Section 11 Granted absolutely, shall not collect tax, in excess of the effective rate

4 Credit Reversal 4 Exempt Generally Either absolutely Or subject to such conditions as may be specified Whole or any part of the tax leviable thereon Effective from the date as mentioned in the Notification Will part exemption of tax require tax reversal? exempt supply means supply of any goods or services which may be wholly exempt from tax under section 11

5 Retrospective Amendment 5 Clarity of Scope or Applicability of any Notification Insert explanation to the Notification / Order within 1 year Explanation to have retrospective impact

6 Exemption under SGST / UTGST 6 Section 11(4) Any Notification / Order under Section 11(1) or 11(2) deemed to issued under SGST / UTGST Reverse is not true Notification / Order under IGST not a Notification / Order under CGST and the reverse

7 Construction 7 Services by way of pure labour contracts of construction, erection, commissioning, or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex Construction of Complex, Building etc 18% Includes Land then 1/3 deduction towards Land

8 Interest Income 8 Interest Income Supply? Definition of Goods and Services exclude Money Services includes activities relating to use of money Specific exemption from tax on interest income Presence of an exemption is a confirmation of levy Explanation Exempt supplies not to include interest or discount except for Banking Companies, financial institutions etc (inserted wef January 23, 2018) Dividends? Securities covered under Sch III Duty Scrips Liquidated damages to Government for non performance

9 Expense by Associations 9 Monthly contribution upto Rs 7500 per member Contribution exceeding Rs 7500 Two houses in the same apartment? Interest for delayed payment Electricity and Water Charges of flat / common area Pure Agent Deposit / Sinking Fund for later use / specific use Capital Contribution by Multiple Organizations to purchase a common asset will be treated as transaction in money and not liable to tax (Circular 35/2017)

10 Rate of Tax 10 Accommodation Services and Declared Tariff (Circular 27/2018) Relevance of Declared Tariff Extra Bed provided with the Room Different Declared Tariff Highest Price Seasonal Declared Tariff Time of Supply determines the rate of tax Upgrade to higher declared tariff room Declared Tariff excludes taxes

11 Accommodation Services 11 No tax if rent does not exceed Rs 1000 Hotels Renting of religious precints Trust No tax even if exceeds Rs 1000 Hospitals Educational Institute to Students Wellness Centre cum Accommodation Services

12 Restaurant Services 12 Serving Food 5% w/o ITC or 18% with ITC Take Away same as above Catering of food 18% Mess / Canteen Facility 5% Hospitals to Patients No tax Hospitals to others applicable taxes Educational Institution to Students No tax

13 Supplies to SEZ 13 Zero Rating of Blocked Credits Works Contract and Rent a Cab Service No Zero Rating in case of non approved list of services Accommodation and Convention Services covered Restaurant and Banquet not covered

14 Meaning of Supply 14 High Sea Sales and In Bond Sale High Sea Sale not liable to GST (Customs Circular 33/2017) Sale of Warehoused Goods Liable to Tax (Customs Circular 46/2017) Sale of Warehoused Goods (from April 1, 2018) Not liable to Tax (IGST Circular 3/2018)

15 Tenancy Rights 15 Tenancy Rights in residential dwelling (Circular 44/2017) Tenancy Rights are supply (Schedule II) Not Sale of Land or Building (not excluded by Schedule III) Registration and payment of stamp duty not of consequence to determine taxability under GST Two types of tenancies Tenancy Rights by outgoing tenant to incoming tenant Exempt Surrender of Tenancy Rights by outgoing tenant - Taxable

16 Composite v Mixed Supply 16 Service of Car involving Goods and Services (Circular 47/2018) Value of goods and services separately mentioned then liable to tax at respective rates Recovery of Charges by DISCOMS (Circular 34/2017) Electricity - Exempt Other Charges - Taxable Liquor Service charges related to liquor Liquor License from the Govt

17 Credit Reversals 17 Specific for taxable Specific for exempt Supplies where rate prescribed subject to no credit Land, Building and Security Liquor Common Inputs, Input Services and Capital Goods Proportionate Turnover

18 Indirect Taxes Committee of ICAI at and Register on for updates and resource material from ICAI 18 8/7/2018