GST - Lecture 4 - Exemptions from GST.pdf

AR M GST Revisionary Series KU CA Intermediate T AN May, 2024 asdf H Lecture 4 – Exemptions from GST IS N CA Nishant Kumar A C ...

AR M GST Revisionary Series KU CA Intermediate T AN May, 2024 asdf H Lecture 4 – Exemptions from GST IS N CA Nishant Kumar A C  AR Income Tax Revision Schedule M Date Day Topic KU 01-02-2024 Thursday L1 - Basics of Taxation and General Tax Rates 03-02-2024 Saturday L2 - Residence and Scope of Total Income 06-02-2024 Tuesday L3 - Income from Salaries T 08-02-2024 Thursday L4 - Income from House Property AN 10-02-2024 Saturday L5 - Profits and Gains from Business or Profession 13-02-2024 Tuesday L6 - Capital Gains 15-02-2024 Thursday L7 - Income from Other Sources H 17-02-2024 Saturday L8 - Clubbing of Income 20-02-2024 Tuesday IS L9 - Set Off; Carry Forward of Losses 22-02-2024 Thursday L10 - Deductions from Gross Total Income N 02-03-2024 Saturday L11 - Return Filing and Self Assessment 03-03-2024 Sunday L12 - TDS, TCS, Advance Tax A 04-03-2024 Monday L13 - Income Tax Liability - Computation and Optimization C  AR GST Revision Schedule M Date Day Topic KU 05-03-2024 Tuesday L1 - Supply Under GST 07-03-2024 Thursday L2 - Charge Under GST; Composition Levy 11-03-2024 Monday L3 - Place of Supply T 13-03-2024 Wednesday L4 - Exemptions from GST AN 15-03-2024 Friday L5 - Time of Supply 18-03-2024 Monday L6 - Value of Supply H 20-03-2024 Wednesday L7 - Input Tax Credit 22-03-2024 Friday L8 - Registration Under GST IS 25-03-2024 Monday L7 - Tax Invoice; Credit and Debit Notes; E-Way Bill N 27-03-2024 Wednesday L8 - Accounts and Records; TDS & TCS 29-03-2024 Friday L9 - Payment of Tax A 30-03-2024 Saturday L10 - Returns Under GST C  Chapter 6 – Exemptions From GST Charitable Activities Charitable Activities AR Services by Charitable Institutions M Recreational Services by Import of Training or KU Old Age Home Charitable Entity Services Coaching Entry 1 Entry 80 Entry 10 Entry 9D T Services by an entity registered u/s 12AA or 12AB of the Income Tax Act, 1961, by way of “charitable AN activities” are exempt. Meaning of Charitable Activities The term ‘charitable activities’ mean activities relating to: H 1. PUBLIC HEALTH by way of a. care or counseling of i. terminally ill persons or persons with severe physical or mental disability; IS ii. persons afflicted with HIV or AIDS; iii. persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or b. public awareness of preventive health, family planning or prevention of HIV infection; N 2. ADVANCEMENT OF RELIGION, spirituality or yoga; 3. ADVANCEMENT OF EDUCATIONAL PROGRAMMES/SKILL DEVELOPMENT relating to, a. abandoned, orphaned or homeless children; A b. physically or mentally abused and traumatized persons; c. prisoners; or d. persons over the age of 65 years residing in a rural area; C 4. PRESERVATION OF ENVIRONMENT including watershed, forests & wildlife. Thus, only those services provided by a charitable and religious trusts [registered under section 12AA of the Income-tax Act] which fall within the above definition of charitable activities, are eligible for exemption from GST. CA NISHANT KUMAR 1  There could be many other services provided by such charitable and religious trusts which are not covered by the definition of charitable activities and hence, such services would attract GST. Other Aspects Service Taxability 1. Grant of advertising rights to a person on the premises of the Taxable charitable/religious trust or on publications of the trust AR 2. Granting admission to events, functions, celebrations, shows against admission Taxable tickets or fee etc. 3. Advancement of any other object of general public utility Taxable 4. Advancement of religion, spirituality, yoga, meditation camp Exempt 5. Residential programmes or camps where the fee charged includes cost of Exempt lodging and boarding, where the primary and predominant activity, objective M and purpose of such residential programmes or camps is advancement of religion, spirituality or yoga. 6. Merely providing accommodation or serving food and drinks against Taxable KU consideration in any form including donation 7. Activities of holding fitness camps or classes such as those in aerobics, dance, Taxable music, etc. 8. Services provided by a clinical establishment, an authorised medical Exempt practitioner, or paramedics of a charitable trust 9. Services provided TO charitable or religious trusts Taxable T 10. Service of display of name or placing of name plates of the donor in the Exempt premises of charitable organisations receiving donations or gifts from individual donors – if the same is not aimed at giving publicity to the donor in such manner AN that it would be an advertising or promotion of his business 11. Service of display of name or placing of name plates of the donor in the Taxable premises of charitable organisations receiving donations or gifts from individual donors – if the same is aimed at giving publicity to the donor in such manner that it would be an advertising or promotion of his business H Recreational Training or Coaching Services by way of training or coaching in: IS 1. Recreational activities relating to arts or culture, by an individual, or 2. Sports by charitable entities registered under section 12AA or 12AB of the Income Tax Act, N are exempt from tax. Service Taxability 1. Training or coaching in recreational activities relating to arts or culture by Exempt A Individual 2. Training or coaching in recreational activities in areas other than arts or culture Taxable by Individual C 3. Service of sports activities provided by charitable entity registered under Exempt section 12AA or 12AB 4. Service other than of sports activities provided by charitable entity registered Taxable under section 12AA or 12AB 5. Training or coaching related to all forms or arts, culture, or sports, such as, Exempt dance, music, painting, sculpture making, literary activities, theatre, sports, etc. CA NISHANT KUMAR 2  Import of Services Services received by an entity registered under Section 12AA or 12AB of the Income Tax Act, 1961, for the purpose of conducting charitable activities, from a service provider located in a non-taxable territory, are eligible for exemption. However, this exemption does not apply to OIDAR (Online Information and Database Access or Retrieval) services and import sea freight. Services by Old Age Home AR An old age home operated by an entity registered under Section 12AA or 12AB of the Income Tax Act, 1961, is allowed to offer services to its residents (who are aged 60 years or older) for a consideration of up to ₹ 25,000 per month per member. This consideration includes charges for boarding, lodging, and maintenance. These services are eligible for exemption from taxation. M Religious Services KU T AN H IS N Agricultural Services Service Taxability A 1. Loading, unloading, packing, storage or warehousing of rice Exempt 2. Warehousing of minor forest produce Exempt 3. Services by way of storage/warehousing of cereals, pulses, fruits, nuts & Exempt C vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, coffee & tea 4. Fumigation in a warehouse of agricultural produce Exempt 5. Artificial insemination of livestock (other than horses) Exempt CA NISHANT KUMAR 3  6. Carrying out an intermediate production process as job work in relation to Exempt cultivation of plants & rearing of animals [except horses], for food, fibre, fuel, raw material or other similar products or agricultural produce. 7. Services relating to cultivation of plants & rearing of animals [except horses], Exempt for food, fibre, fuel, raw material or other similar products or agricultural produce 8. Agricultural operations directly related to production of any agricultural Exempt produce including cultivation, harvesting, threshing, plant protection or testing AR 9. Supply of farm labour Exempt 10. Processes carried out at an agricultural farm including tending, pruning, cutting, Exempt harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable M for the primary market 11. Renting or leasing of agro machinery or vacant land with/without a structure Exempt incidental to its use KU 12. Leasing of vacant land with a green house or a storage shed meant for Exempt agricultural produce 13. Loading, unloading, packing, storage or warehousing of agricultural produce; Exempt 14. Agricultural extension services (i.e., transmitting latest technical know-how to Exempt farmers and enhancing farmers’ knowledge about crop techniques to help them increase productivity) 15. Services by any Agricultural Produce Marketing Committee or Board or services Exempt T provided by a commission agent for sale/purchase of agricultural produce 16. Services mentioned from points 7 to 15 for Rubber, Green Tea, or Coffee Exempt AN 17. Breeding of Fish (Pisciculture) Exempt 18. Rearing of Silkworms (Sericulture) Exempt 19. Cultivation of Ornamental Flowers (Floriculture), Horticulture, Forestry, etc. Exempt 20. Cleaning of Wheat carried outside farm Exempt 21. Services by Agricultural Produce Marketing Committees (APMC) or Boards by Exempt provision of facilities like sheds, water, light, electricity, grading facilities, etc. H 22. Services by Agricultural Produce Marketing Committees (APMC) or Boards by Exempt taking measures for prevention of sale or purchase of agricultural product below the minimum support price IS 23. Seed testing, soil testing, animal feed testing, testing of samples from plants or Exempt animals for pets and disease-causing microbes 24. Services in relation to whole grain pluses, such as whole gram, rajma, etc. Exempt N 25. Pre-conditioning, pre-cooling, ripening, waxing, retail packing, labeling of fruits Exempt and vegetables which do not change or alter the essential characteristics of the said fruits and vegetables 26. Services by National Centre for Cold Chain Development by way of cold chain Exempt A knowledge dissemination C Service Taxability 1. Loading, unloading, packing, storage or warehousing of black tea, green tea, Taxable coffee 2. Processing of Sugarcane into Jaggery Taxable 3. Milling of paddy into rice Taxable CA NISHANT KUMAR 4  4. Processes carried for making the agricultural produce saleable in retail market, Taxable e.g., grinding, sterilizing, extraction packaging in retail packs of agricultural products 5. Services for converting potato into potato chips Taxable 6. Services for converting tomato into tomato ketchup Taxable 7. Services by Agricultural Produce Marketing Committees (APMC) or Boards not Taxable directly related to agriculture, such as renting of shops and other property 8. Services in relation to de-husked or split pulses Taxable AR 9. Warehousing of unmanufactured tobacco Taxable Educational Services M KU T AN H IS N A C CA NISHANT KUMAR 5  Service Taxability 1. Services provided BY an Educational Institution: a. to its students, faculty and staff Exempt b. by way of conduct of entrance examination against consideration in Exempt form of entrance fee 2. Services provided TO an Educational Institution (providing services by way of pre-school education & education up to higher secondary school or equivalent) by way of: AR a. transportation of students, faculty and staff Exempt b. catering, including any mid-day meals scheme sponsored by the Exempt Central Government (CG), State Government (SG) or Union Territory (UT) c. security/cleaning/house-keeping services performed in such EI Exempt M 3. Services provided TO an Educational Institution by way of: a. services relating to admission to, or conduct of examination by, such Exempt Educational Institution KU b. supply of online educational journals or periodicals. Exempt (This exemption is only applicable to an institution providing services by way of education as part of a curriculum for obtaining qualification recognised by any law for time being in force.) (This exemption is not applicable to an institution providing services by way of: ▪ pre-school education and education upto higher secondary T school or equivalent; or ▪ education as a part of an approved vocational educational AN course.) 4. Education up to higher secondary school Exempt 5. Services by CBSE Board and State Education Boards (SEBs) by way of conduct Exempt of examination to the students 6. Services by any authority, board, or body set up by the Central Government Exempt or State Government including National Testing Agency by way of conduct H of entrance examination for admission to educational institutions 7. Services provided by boarding schools – Education coupled with Residence Exempt and Food. Here, predominant activity is service of education, therefore, the IS entire consideration is exempt. 8. Renting of residential dwelling (boarding) Exempt 9. Modular Employable Skill Course Exempt N 10. Services provided by international schools giving certifications like IB Exempt (equivalent to education upto higher secondary school) 11. Supply of Food to Aanganwadi Exempt 12. Services by Industrial Training Institutes (ITIs) in respect of designated trades Exempt A notified under Apprenticeship Act, 1961 (either Private or Government) 13. Training courses by the Maritime Training Institutes Exempt 14. Services by National Board of Examination by way of conduct of examination Exempt C (including any entrance examination) 15. Educational institutions providing non-recognized qualification with recognized qualification courses: a. Artificial Bundling Taxable (Highest Rate) b. Natural Bundling Exempt CA NISHANT KUMAR 6  16. College Hostel Mess a. Catering Services provided by Educational Institutions Exempt b. Catering Services provided by third person in Hostel Mess Taxable 17. Services provided by Indian Institute of Management a. All long duration programs (one year or more) conferring Exempt degree/diploma as recommended by Board of Governors as per the power vested in them under the IIM Act, 2017 including one-year Post Graduate Programs for Executives AR b. All short duration executive development programs or need based Taxable specially designed programs (less than one year) which are not a qualification recognized by law 18. Education as part of a curriculum for obtaining a qualification recognized by Exempt an Indian law M 19. Conduct of degree courses by colleges, universities or institutions which lead Exempt grant of qualifications recognized by law 20. Education as part of a curriculum for obtaining a qualification recognized by Taxable KU a foreign law 21. Short stay by different persons in furnished flats Taxable 22. Private tuitions Taxable 23. Fees charged by educational institutions in relation to campus recruitment Taxable from prospective employers 24. Placement services provided to Educational Institutions Taxable 25. Institutes preparing students for Board Exams as well as for Competitive Taxable T Exams 26. Postal Coaching provided by Educational Institutions Taxable AN 27. Foreign Courses conducted by Private Institutes Taxable 28. Personality Development Institutes - Institutes that offer general course on Taxable improving communication skills, personality development, how to be effective in group discussions or personal interviews, general grooming and finishing, etc. 29. Renting of immovable property to higher secondary school Taxable H 30. Renting of immovable property to Commercial coaching centre Taxable 31. Outdoor catering services provided to educational institutions running Taxable approved vocational courses IS 32. House-keeping and cleaning services in college providing recognised Taxable graduation degree 33. Placement services provided to an Educational Institute Taxable N 34. Development of course content services provided to an Educational Institute Taxable 35. Training of Staff of Higher Secondary School Taxable 36. Subscription of online educational journals/periodicals Taxable 37. Housekeeping services to coaching institutes Taxable A 38. Fee charged for issuance of eligibility certificate for admission or for issuance Exempt of migration certificate by educational institutions C Health Care Services Meaning of Health Care Services: o Health care services refer to services that involve diagnosing, treating, or caring for illnesses, injuries, deformities, abnormalities, or pregnancy in any recognized system of medicine in India. CA NISHANT KUMAR 7  o These services also include transporting the patient to and from a clinical establishment (like a hospital or medical center). o However, health care services do not cover certain procedures like hair transplant or cosmetic/plastic surgery, except when these surgeries are done to restore or reconstruct the body’s anatomy or functions affected due to congenital defects, developmental abnormalities, injury, or trauma. Recognised System of Medicines: AR o Allopathy o Yoga o Naturopathy o Ayurveda o Homeopathy M o Siddha o Unani o Any other system of medicine that may be recognised by the Central Government KU Particulars Taxability 1. Health care services provided by: Exempt a. Clinical establishments (like hospitals or medical centres), b. Authorized medical practitioners (doctors), or c. Para-medics (healthcare professionals like nurses or medical technicians) However, if a clinical establishment provides a room (excluding special units like T ICU, CCU, ICCU, NICU) and charges more than ₹ 5,000 per day for it to a person receiving health care services, then that specific room service is not exempt AN from taxes. In other words, the income generated from providing such high- cost room services is taxable. But the rest of the health care services remain tax-exempt. Notes: a. ICU: Intensive Care Unit; CCU: Critical Care Unit; ICCU: Intensive Cardiac Care Unit; NICU: Neo Natal Intensive Care Unit H b. “Clinical establishment” means a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that IS offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India, or a place established as an independent entity or a part of an establishment to carry out diagnostic or N investigative services of diseases. c. “Authorised medical practitioner” means a medical practitioner registered with any of the councils of the recognised system of medicines established or recognised by law in India and includes a A medical professional having the requisite qualification to practice in any recognised system of medicines in India as per any law for the time being in force. C d. “Paramedics” are trained health care professionals, for example nursing staff, physiotherapists, technicians, lab assistants etc. Services by them in a clinical establishment would be in the capacity of employee and not provided in independent capacity and will thus be considered as services by such clinical establishment. Similar services in independent capacity are also exempted. CA NISHANT KUMAR 8  2. Palliative care for terminally ill patients at patients’ home (Palliative care is Exempt given to improve the quality of life of patients who have a serious or life- threatening disease, but the goal of such care is not to cure the disease) 3. Services provided by cord blood bank unit of the nursing home by way of Exempt preservation of stem cells 4. Ambulance services to transport critically ill patients from various locations to Exempt nursing home 5. Naturopathy treatments. Such treatment is a recognized system of medicine in Exempt AR terms of section 2(h) of the Clinical Establishments Act, 2010 6. Plastic surgery to restore anatomy of a child affected due to an accident Exempt 7. Mortuary Services Exempt 8. Food supplied by the hospital canteen to the in-patients as advised by the Exempt doctor/nutritionists M 9. Treatment or Disposal of Bio-medical waste by operators of the common bio- Exempt medical waste treatment facility 10. Health care of animals/birds by a veterinary clinic Exempt KU 11. Rehabilitation, Therapy or Counselling by rehabilitation professionals Exempt recognized under the Rehabilitation Council of India Act, 1992 12. Rent on rooms provided to in-patients Exempt 13. Consultation fees paid by hospitals to senior doctors/consultants/technicians Exempt 14. Services in form of Assisted Reproductive Technology (ART)/In vitro fertilization Exempt (IVF) 15. Hospitals charge the patients, say, ₹ 10,000/- and pay to the Exempt T consultants/technicians only ₹ 7,500/- and keep the balance for providing ancillary services which include nursing care, infrastructure facilities, paramedic AN care, emergency services, checking of temperature, weight, blood pressure, etc. Is GST applicable on such money retained by the hospitals? 16. Hair transplant services Taxable 17. Pranic healing treatments. Such treatment is not a recognized system of Taxable medicine in terms of Section 2(h) of the Clinical Establishments Act, 2010 18. Services other than healthcare services such as renting of shops, auditoriums in Taxable H the premises of the clinical establishment, display of advertisements etc. 19. Supplies of food by a hospital to patients (not admitted) or their attendants or Taxable visitors IS Services Provided BY Government Service Taxability N 1. Services by Government Authority in relation to Municipality functions Exempt Note: Governmental Authority: a. “Governmental Authority” refers to an authority, board, or any other body that falls into either of the following categories: A i. It is set up by an Act of Parliament or a State Legislature, or ii. It is established by any level of the Government (Central or State Government). C b. For a body to be considered a “Governmental Authority”, it must have 90% or more participation in terms of equity or control by the Government. c. These services are specifically related to carrying out functions that are entrusted to a Municipality under Article 243W of the Constitution or to a Panchayat under Article 243G of the Constitution. CA NISHANT KUMAR 9  2. Services by Government Authority in relation to Panchayat functions Exempt 3. Services by Department of Posts and the Ministry of Railways (Indian Taxable Railways) (effective from 20-10-2023) 4. Services in relation to aircraft or vessel inside or outside the precincts of a port Taxable or airport 5. Transport of goods or passengers Taxable 6. Any service other than the above three provided to business entities Taxable 7. Services by Department of Posts (Basic Mail Services, i.e., postal services, post Exempt AR card, inland letter, book post and ordinary post (envelopes weighing less than 10 grams) to meet the universal postal obligations 8. Services by way of ordinary post (envelopes weighing 10 grams or more), Taxable registered post, speed post, express parcel post, life insurance, and agency services provided to a person other than the Government or Union Territory M (In respect of these services, the Department of Posts is liable to pay tax without application of reverse charge) 9. Services by Department of Posts (Transfer of money through money orders, Exempt KU operation of savings accounts, issue of postal orders, pension payments and other services) 10. Services by Department of Posts – Distribution of Mutual Funds, Bonds, Taxable Passport Applications, collection of telephone and electricity bills on commission basis 11. Services by Police or Security Agencies of Government to private business Taxable entities T (Taxable under Reverse Charge) 12. General Insurance Policies provided by a State Government to employees of AN State Government/Police Personnel, employees of Electricity Department or students of colleges/private schools, etc.: a. If premium is paid by State Government Exempt b. If premium is paid by employees, students, etc. Exempt 13. Accommodation services supplied by Air Force Mess to its personnel: a. If the services supplied by such messes qualify to be considered as Exempt H services supplied by Central Government, State Government, Union Territory or local authority b. Otherwise Taxable IS 14. Services provided by Government/UT/Local Authority to a Business Entity (with Exempt aggregate turnover below the threshold limit for registration) (except services mentioned in points 3, 4, 5) N 15. When government provides services by way of renting of immovable property Taxable to business entity (even if the aggregate turnover of the entity is below the threshold limit for registration) 16. Services provided by Government/Local Authority to another Exempt A Government/Local Authority (except services mentioned in points 3, 4, 5) 17. Services provided by Government/UT/Local Authority where consideration ≤ Exempt ₹ 5,000 (except services mentioned in points 3, 4, 5) C 18. Old Age Homes run by Government where residents are aged 60 years or more Exempt and consideration (including boarding, lodging, maintenance) is ≤ ₹ 25,000 19. Services by the Department of Posts by way of post card, inland letter, book Exempt post and ordinary post (envelopes weighing less than 10 grams) 20. Services by Government/UT/Local Authority to their undertakings or PSUs by Exempt way of guaranteeing the loans taken by them 21. Services in relation to Registration required under any law Exempt CA NISHANT KUMAR 10  22. Services by way of testing, calibration, safety check or certification relating to Exempt protection or safety of workers, consumers, or public at large, including fire license 23. Services to individuals by way of issuance of passport, visa, driving license, birth Exempt certificate, death certificate 24. Granting national permit to a goods carriage to operate throughout Exempt India/contiguous states 25. Fines, liquidated damages collected for non-performance of contract Exempt AR 26. Fines, penalties imposed for violation of statute, byelaws, rules or regulations Exempt 27. Assignment of right to use natural resources to an individual farmer for agricultural purposes a. To an individual farmer for agricultural purposes Exempt b. To companies (including PSUs) for exploration of natural resources, for Taxable M which consideration is received in the form of annual license fee, lease charges, royalty, etc. 28. Services by way of deputing officers after office hours or on holidays for Exempt KU inspection or container stuffing or such other duties in relation to import export cargo, where the consideration to these officers is “Merchant Overtime Charges” 29. Services by a State Government to Excess Royalty Collection Contractor (ERCC) Exempt by way of assigning the right to collect royalty on behalf of the State Government on the mineral dispatched by the mining lease holders T Services Provided TO Government/Union Territory/Local Authority Services Taxability AN 1. Pure services (excluding works contract service or other composite supplies Exempt involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution (See Notes 1 and 2). H 2. Pure services (excluding works contract service or other composite supplies Exempt involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority by way of any activity in IS relation to any function entrusted to a Municipality under article 243W of the Constitution (See Note 3) 3. Supply by a Government Entity (See Note 4) to Government/UT/LA in the form Exempt of Grants N 4. By Fair Price Shops by way of sale of food grains, kerosene, sugar, edible oil, etc. Exempt 5. Services provide under any insurance scheme for which total premium is paid Exempt by the Government 6. By GST Network Exempt A 7. Services provided under any training programme for which 75% or more of the Exempt total expenditure is borne by the Government 8. Services provided any institutions/NGOs under the central scheme of Exempt C “Scholarships for students with Disabilities” where the total expenditure is borne by the Government 9. Services provided to a Governmental Authority by way of water supply, public Exempt health, sanitation and conservancy, solid waste management and slum improvement and upgradation (effective from 20-10-2023) [Notification No. 13/2023-CT(R) dt. 19.10.2023] CA NISHANT KUMAR 11  10. Composite supplies involving supplies on any goods a. Value of goods ≤ 25% of value of supply Exempt b. Value of goods > 25% of value of supply Taxable 11. Sanitation and conservancy services supplied to Army and other Central and Taxable State Government departments 12. Works Contract Services Taxable Notes: AR 1. Definition of Pure Services: According to the language used in the notification, when services are provided without involving any supply of goods, they are considered as ‘pure services’. For instance, services like supplying manpower for cleanliness of roads, public places, architect services, consulting engineer services, advisory services, and similar services provided by businesses, without any supply of goods, fall under the category of pure services. On the other M hand, let’s consider a situation where a governmental authority awards a contract for the maintenance of streetlights in a Municipal area to an agency. If this contract involves not only maintenance but also the supply of replacement lights and other spare parts, it would be KU categorized as a works contract service. The exemption is applicable only to services that solely involve the supply of services and not to works contract services. 2. Functions Entrusted to Panchayat: The functions assigned to Panchayats under the Eleventh Schedule to Article 243G of the constitution encompass various areas, such as Agriculture, including agricultural extension services, Animal husbandry, dairying, and poultry services, Fisheries services, Small-scale industries, including food processing industries, Providing T drinking water, Ensuring fuel and fodder availability, Rural electrification, including electricity distribution, Health and sanitation services, including hospitals, primary health centers, and dispensaries, Women and child development programs, Operating the Public distribution AN system, and more. 3. Functions Entrusted to Municipality: The functions delegated to municipalities under the Twelfth Schedule to Article 243W of the constitution involve responsibilities like Urban planning, including town planning, Construction and maintenance of roads and bridges, Public health and sanitation services, Waste management and conservancy services, Fire services, H Improving and upgrading slum areas, Promoting cultural, educational, and aesthetic aspects of the city, Providing urban amenities and facilities, such as parks, gardens, playgrounds, Street lighting, parking lots, bus stops, public conveniences, etc. IS 4. Government Entity means a body set up by an Act of Parliament or State Legislature or by any Government, where 90% or more participation by way of equity or control is of the government. N 5. A statutory body, corporation or an authority created by the Parliament, or a State Legislature is neither “Government” nor a “Local Authority”. Construction Services A Services Taxability 1. Services provided by way of pure labour contracts of construction, erection, Exempt C commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works pertaining to the beneficiary-led individual house construction or enhancement under the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojna (Note 1) 2. Services by Electricity Distribution Utilities for extending electricity distribution Exempt network upto the tube well of the farmer or agriculturalist for agricultural use CA NISHANT KUMAR 12  3. Pure labour contract pertaining to a single residential unit (not being a part of Exempt a residential complex) Notes: 1. Beneficiary-Led Construction (BLC) refers to the central government providing financial assistance up to ₹ 1.5 lakh to beneficiaries belonging to the Economically Weaker Sections (EWS) category (having annual income ≤ ₹ 3,00,000) for either construction of houses or upgradation of their existing houses. AR Passenger Transport Services Service Taxability 1. Transport of passengers with or without accompanied belongings by air in Exempt economy class, embarking from or terminating in an airport located in the state M of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura, or at Bagdogra located in West Bengal 2. Transport of passengers with or without accompanied belongings by non-air- Exempt KU conditioned contract carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, charter or hire 3. Transport of passengers with or without accompanied belongings by Non-AC Exempt Stage carriage 4. Services mentioned in points 2 and 3 above provided through an e-commerce Taxable operator, and notified u/s 9(5) of the CGST Act, 2017 5. Transportation taking place over pre-determined route on a pre-determined Exempt T schedule in non-air-conditioned contract carriage Therefore, engagement of non-air-conditioned contract carriages by firms for AN transportation of their employees to and from work is exempt. 6. Services provided to the Central Government by way of transport of passengers Exempt with or without accompanied belongings, by air, embarking from or terminating at a regional connectivity scheme (RCS) airport, against consideration in the form of viability gap funding (See Note 1) 7. By railways (other than in first class or AC coach) Exempt H 8. By metro, monorail or tramway Exempt 9. By inland waterways, including national waterways Exempt IS 10. By public transport (other than predominantly for tourism purpose) in a vessel Exempt between places located in India 11. By metered cabs or auto rikshaws (including e rikshaws) (only if not provided Exempt through e-commerce operator) N 12. By Non-airconditioned contract carriage for transportation of passengers Taxable through e-commerce operator 13. By radio taxi Taxable 14. For tourism, conducted tour, charter, or hire Taxable A 15. Non-AC Stage carriage through e-commerce operator Taxable 16. AC Stage carriage Taxable 17. By railways in first class or AC coach (only if not provided through e-commerce Taxable C operator) 18. By leisure or charter vessels or a cruise ship Taxable 19. By ropeway, cable car, aerial tramway Taxable Notes: 1. There are a lot of under serviced air routes in India. UDAN (Ude Desh ka Aam Nagrik) is a regional airport development program of the Government of India and part of the Regional CA NISHANT KUMAR 13  Connectivity Scheme (RCS) of upgrading under-serviced air routes. Its goal is to make air travel affordable and improve economic development in India. For this, the Government has tied up with a lot of private players. This is known as Public Private Partnership (PPP). The private sector takes care of the construction part, and the public sector provides for the money, called the viability gap funding. 2. The value of any taxable service includes the taxes levied by any government on any passenger travelling by air, as only taxes levied under GST law are excluded. Hence, passenger taxes shall AR form part of taxable value of supply. Goods Transportation Services Service Taxability 1. By road Exempt M 2. By a goods transport agency Taxable 3. By a courier agency Taxable 4. By inland waterways Exempt KU 5. By Express Cargo Service (Door-to-door transportation of goods making special Taxable arrangements for speedy transportation and timely delivery of goods) 6. By Angadia (It is kind of a courier service which undertakes delivery of Taxable documents, goods, or articles received from a customer to another person for a consideration) 7. Transportation of goods by an aircraft from a place outside India upto the Exempt customs station of clearance in India T 8. Transportation of goods by an aircraft from customs station of clearance in India to a place outside India: AN a. Upto 30-09-2022 Exempt b. After 30-09-2022 Taxable 9. Transportation of goods by a vessel from customs station of clearance in India to a place outside India: a. Upto 30-09-2022 Exempt b. After 30-09-2022 Taxable H 10. Satellite launch services supplied by Indian Space Research Organisation, Antrix Exempt Corporation Limited, or New Space India Limited 11. Satellite launch services supplied by all other entities (from 27-07-2023) Exempt IS (Notification No. 07/2023- CT(R) dt. 26.07.2023) 12. Transportation of the following goods by rail or vessel: Exempt a. Relief materials meant for victims of natural or man-made disasters, N calamities, accidents, or mishap; b. Defence or military equipment; c. Newspaper or magazines registered with the Registrar of Newspapers; d. Railway equipment or materials; A e. Agricultural produce; f. Milk, salt and food grain including flours, pulses, and rice; and g. Organic manure C 13. Services provided by Goods Transport Agency by way of transport in a goods Exempt carriage of: (See Note) a. Agricultural produce b. Goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage ≤ ₹ 1,500 c. Goods, where consideration charged for transportation of all such goods for a single consignee ≤ ₹ 750 CA NISHANT KUMAR 14  d. Milk, salt, and food grain including flour, pulses, and rice e. Organic manure f. Newspaper or magazines registered with the Registrar of Newspapers g. Relief materials meant for victims of natural or man-made disasters, calamities, accidents, or mishaps; or h. Defence or military equipment 14. Individual truck/tempo operators who do not issue any consignment note Exempt 15. Time sensitive transportation of goods by road in a goods carriage by a GTA Exempt AR shall be classified as GTA and not under courier service, if: a. The entire transportation of goods is by road; and b. The person transporting the goods issues a consignment note. 16. Transport of minerals from mining pit head to railway siding, beneficiation Taxable plant, etc. by vehicles deployed with driver for a specific duration of time M 17. Services provided by GTA to an unregistered person Exempt 18. Services provided by GTA to Persons Registered only for TDS Exempt 19. Transport of postal mails and postal bags Taxable KU 20. Transport of household effects Taxable 21. Transport of petroleum products Taxable 22. Transport of tea Taxable 23. Transport of sugar Taxable 24. Transport of alcoholic beverages Taxable 25. Transport of baled cotton Taxable Note: Goods transport agency T 1. Goods transport agency means any person who: a. Provides service in relation to transport of goods by road; and AN b. Issues consignment note, by whatever name called. Thus, it can be seen that issuance of a consignment note is the essential condition for a supplier of service to be considered as a GTA. If such a consignment note is not issued by the transporter, the service provided will not come within the ambit of GTA. 2. If a consignment note is issued, it indicates that the lien on the goods has been transferred (to H the transporter) and the transporter becomes responsible for the goods till its safe delivery to the consignee. It is only the services of such GTA, who assumes agency functions, that is being IS brought into the GST net. 3. Taxation in case of a GTA has already been discussed in Chapter 3 – Charge of GST. Banking and Financial Services N Services Taxability 1. Services BY Reserve Bank of India Exempt 2. Services TO Reserve Bank of India Taxable A 3. Services of extending deposits, loans or advances in so far as the consideration Exempt is represented by way of interest or discount (other than interest involved in credit card services) C 4. Services of sale and purchase of foreign currency amongst banks or authorised Exempt dealers of foreign exchange or amongst banks and such dealers 5. Fixed deposits or savings deposits or any other such deposits in a bank or a Exempt financial institution for which return is received by way of interest 6. Providing a loan or overdraft facility or a credit limit facility in consideration for Exempt payment of interest CA NISHANT KUMAR 15  7. Mortgages or loans with a collateral security to the extent that the Exempt consideration for advancing such loans or advances is represented by way of interest 8. Corporate deposits to the extent that the consideration for advancing such Exempt loans or advances is represented by way of interest or discount 9. Service charges or administrative charges or entry charges collected over and Taxable above interest on loan, advance or a deposit 10. Service charges or service fees or documentation fees or broking charges for Taxable AR such like fees or charges are charged on a derivative/future contract/forward contract/invoice or cheque discounting 11. Invoice discounting cheque discounting or any other similar form of discounting Exempt to the extent consideration is represented by way of discount 12. Interest/delayed payment charges for delay in payment of brokerage Exempt M amount/settlement obligations/margin trading facility 13. Interest charged on outstanding credit card balances Taxable 14. Services provided by a banking company to Basic Saving Bank Deposit (BSBD) Exempt KU account holders under Pradhan Matri Jan Dhan Yojna 15. Services by an acquiring bank to any person in relation to settlement of an Exempt amount upto ₹ 2,000 in a single transaction transacted through credit card, charge card or other payment card service (Note) 16. Services by an intermediary of financial services located in a multi services SEZ Exempt with International Financial Services Centre (IFSC) status to a customer located outside India for international financial services in currencies other than Indian T Rupees (INR) Note: When you go to a shop and make payment by your credit card, the shop keeper’s bank receives AN the payment. Your bank is known as the issuing bank, i.e., the bank that issued you the credit card. The shop keeper’s bank is known as the acquiring bank, i.e., the bank that acquires that payment from your bank account. Life Insurance Services H Service Taxability 1. Services of life insurance business provided by way of annuity under the Exempt National Pension System regulated by the Pension Fund Regulatory and IS Development Authority of India under the Pension Fund Regulatory and Development Authority Act, 2013 2. Services of life insurance business provided or agreed to be provided by the Exempt Army, Naval and Air Force Group Insurance Funds to members of the Army, N Navy and Air Force, respectively, under the Group Insurance Schemes of Central Government 3. Services of life insurance provided or agreed to be provided by the Naval Group Exempt Insurance Fund to the personnel of Coast Guard under the Group Insurance A Schemes of the Central Government 4. Services of life insurance provided or agreed to be provided by the Central Exempt C Armed Police Forces (under Ministry of Home Affairs) Group Insurance Funds to their members under the Group Insurance Schemes of the concerned Central Armed Police Force 5. Services of life insurance business provided under the following schemes: Exempt a. Janashree Bima Yojana b. Aam Aadmi Bima Yojana CA NISHANT KUMAR 16  c. Life micro-insurance product as approved by the Insurance Regulatory and Development Authority, having maximum amount of cover of ₹ 2,00,000 d. Varishtha Pension Bima Yojana e. Pradhan Mantri Jeevan Jyoti Bima Yojana f. Pradhan Mantri Jan Dhan Yojana g. Pradhan Mantri Vaya Vandan Yojana AR Services Provided by Specified Bodies Service Taxability 1. Services by the Employees’ State Insurance Corporation to persons governed Exempt under the Employees’ State Insurance Act, 1948 2. Services provided by the Employees Provident Fund Organisation to the Exempt M persons governed under the Employees Provident Funds and the Miscellaneous Provisions Act, 1952 3. Services by Coal Mines Provident Fund Organisation to persons governed by the Exempt KU Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948 4. Services by National Pension Scheme (NPS) Trust to its members against Exempt consideration in the form of administrative fee 5. Services provided by the Insurance Regulatory and Development Authority of Exempt India to insurers under the Insurance Regulatory and Development Authority of India Act, 1999 6. Services provided by the Securities and Exchange Board of India set up under Exempt T the Securities and Exchange board of India Act, 1992 by way of protecting the interests of investors in securities and to promote the development of, and to AN regulate, the securities market General Insurance Services 1. Services of general insurance business provided under the following schemes are exempt: a. Hut Insurance Sheme H b. Cattle Insurance under Swarnajayanti Gram Swarozgar Yojana (earlier known as Integrated Rural Development Programme) c. Scheme for Insurance of Tribals IS d. Janata Personal Accident Policy and Gramin Accident Policy e. Group Personal Accident Policy for Self-Employed Women f. Agricultural Pumpset and Failed Well Insurance N g. Premia collected on export credit insurance h. Restructured Weather Based Crop Insurance Schemes (RWCIS), approved by the Government of India and implemented by the Ministry of Agriculture i. Jan Arogya Bima Policy A j. Pradhan Mantri Fasal Bima Yojana (PMFBY) k. Pilot Scheme on Seed Crop Insurance C l. Central Sector Scheme on Cattle Insurance m. Universal Health Insurance Scheme n. Rashtriya Swasthya Bima Yojana o. Coconut Palm Insurance Scheme p. Pradhan Mantri Suraksha Bima Yojana CA NISHANT KUMAR 17  q. Niramaya Health Insurance Scheme implemented by the Trust constituted under the provisions of the National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 r. Bangla Shasya Bima 2. Services by way of reinsurance are exempt. Pension Schemes AR 1. Services by way of collection of contribution under the Atal Pension Yojana are exempt. 2. Services by way of collection of contribution under any pension scheme of the State Governments are exempt. Note: In the pension schemes, the subscribers need to contribute certain amount at regular intervals. This contribution gets collected in the Pension Accounts. M Business Facilitator/Correspondent KU Services Taxability 1. Services by a business facilitator or a business correspondent (See Note) to a Exempt banking company with respect to accounts in its rural area branch 2. Services by any person as an intermediary to a business facilitator or a business Exempt correspondent with respect to services mentioned above 3. Services by a business facilitator or a business correspondent to an insurance Exempt company in a rural area T Note: In many rural areas, there are either no banks or the number of banks is very less. In order to counter this problem and ensure greater financial inclusion, the Reserve Bank of India (RBI) introduced AN the Business Correspondents and Business Facilitator Model through guidelines in 2006 allowing banks to employ two categories of intermediaries – known as Business Facilitators (BFs) and Business Correspondents (BCs). These BCs/BFs help villagers to open bank accounts and provide other banking services to them. They act as an intermediary between the bank and its customers. Banks, in turn, pay commission/fee to the BCs/BFs. H Leasing Services Upfront amount (called as premium, salami, cost, price, development charges or by any other name) IS payable in respect of service by way of granting of long term lease (of 30 years, or more) of industrial plots for development of infrastructure for financial business, provided by the State Government Industrial Development Corporations or Undertakings or by any other entity having 20% or more N ownership of Central Government, State Government, Union Territory to the industrial units or the developers in any industrial or financial business area is exempt. Clarifications: A 1. Even if the upfront amount is paid in instalments, the exemption shall be available. 2. Location charges or preferential location charges (PLC) paid upfront in addition to the lease C premium for long term lease of land constitute part of upfront amount charged for long term lease of land are therefore exempt from tax. Legal Services Services Taxability 1. Services provided by an Arbitral Tribunal to: Exempt CA NISHANT KUMAR 18  a. Any person other than a business entity; or b. A business entity not liable to get registered; or c. The Central Government, State Government, Union Territory, Local Authority, Governmental Authority or Government Entity 2. Services provided by a partnership firm of advocates or an individual as an Exempt advocate, other than senior advocate, by way of legal services to: a. An advocate or partnership firm of advocates providing legal services b. Any person other than a business entity; or AR c. A business entity not liable to get registered; or d. The Central Government, State Government, Union Territory, Local Authority, Governmental Authority or Government Entity 3. Services provided by a senior advocate by way of legal services to: Exempt a. Any person other than a business entity; or M b. A business entity not liable to get registered; or c. The Central Government, State Government, Union Territory, Local Authority, Governmental Authority or Government Entity Notes: KU 1. We’ve already discussed that GST on services provided by an individual advocate (including a senior advocate) or a firm of advocates by way of legal services, directly or indirectly to any business entity located in the taxable territory is to be paid by such business entity on reverse charge basis. 2. Similarly, GST on services supplied by an arbitral tribunal to a business entity has to be paid by T such business entity on reverse charge basis. 3. Also, 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 AN the service under reverse charge mechanism, i.e., the business entity. Sponsorship of Sports Services by way of sponsorship of sporting events organised by the following are exempt: H 1. National sports federation, or its affiliated federations, where the participating teams or individuals represent any district, state, zone, or country 2. Association of Indian Universities, Inter-University Sports Board, School Games Federation of IS India, All India Sports Council for the Deaf, Paralympic Committee of India or Special Olympics Bharat; 3. Central Civil Services Cultural and Sports Board N 4. Indian Olympic Association, as part of national games 5. Under Panchayat Yuva Kreeda Aur Khel Abhiyaan Scheme Skill Development Services A Services Taxability 1. Services provided by: Exempt C a. The National Skill Development Corporation set up by the Government of India; b. A Sector Skill Council approved by the National Skill Development Corporation; c. An assessment agency approved by the Sector Skill Council or the National Skill Development Corporation; CA NISHANT KUMAR 19  d. A training partner approved by the National Skill Development Corporation or the Sector Skill Council in relation to: a. The National Skill Development Programme implemented by the National Skill Development Corporation; or b. A Vocational Skill Development Course under the National Skill Certification and Monetary Reward Scheme; or c. Any other Scheme implemented by the National Skill Development AR Corporation 2. Services of assessing bodies empanelled centrally by the Directorate General of Exempt Training, Ministry of Skill Development and Entrepreneurship by way of assessments under the Skill Development Initiative Scheme. 3. Services provided by training providers (Project implementation agencies) Exempt M under Deen Dayal Upadhyaya Grameen Kaushalaya Yojana implemented by the Ministry of Rural Development, Government of India by way of offering skill or vocational training courses certified by the National Council for Vocational Training KU Performance By Artist Service Taxability 1. Services by an artist by way of performance in folk or classical art forms of Exempt music, dance, or theatre, if the consideration charged for such performance ≤ ₹ 1,50,000 T 2. Services by way of training or coaching in recreational activities relating to arts, Exempt culture, or sports AN 3. Services by an artist as a brand ambassador by way of performance in folk or Taxable classical art forms of music, dance, or theatre, even if the consideration charged for such performance ≤ ₹ 1,50,000 4. Services by an artist by way of performance of western music or dance, modern Taxable theatres, performance of actors in films or television serials 5. Activities of artists in still art forms, such as painting, sculpture making, etc. Taxable H Note: Brand Ambassador means a person engaged for promotion or marketing of a brand of goods, service, property or actionable claim, event or endorsement of name, including a trade name, logo or IS house mark of any person. Right to Admission to Various Events Services Taxability N 1. Services by way of admission to a museum, national park, wildlife sanctuary, Exempt tiger reserve or zoo 2. Services by way of admission to a protected monument so declared under the Exempt A Ancient Monuments and Archaeological Sites and Remains Act, 1958 or any of the State Acts, for the time being in force 3. Services by way of right to admission to: Exempt C a. Circus, dance, or theatrical performance including drama or ballet; b. Award function, concert, pageant, musical performance or any sporting event other than a recognized sporting event; c. Recognized sporting event; d. Planetarium, Where the consideration for right to admission to the events or places mentioned above is ≤ ₹ 500 per person CA NISHANT KUMAR 20  4. Entry to casinos Taxable 5. Services of Betting/Gambling provided by casinos Taxable 6. Elephant/Camel joy ride Taxable Services by Unincorporated Body or Non-Profit Entity Services Taxability 1. Services by an unincorporated body or a non-profit entity registered under any Exempt AR law for the time being in force, to its own members by way of reimbursement of charges or share of contribution: a. As a trade union b. For the provision of carrying out any activity which is exempt from the levy of Goods and Service Tax; or c. Up to an amount of ₹ 7,500 per month per member for sourcing of M goods or services from a third person for the common use of its members in a housing society or a residential complex 2. Services provided by a Housing Society to its members Taxable KU 3. Services by an RWA (having turnover ≤ ₹ 20 lakh in the preceding financial year) Exempt to its members for consideration (maintenance charges) upto ₹ 7,500 per month per member 4. Services by an RWA (having turnover ≤ ₹ 20 lakh in the preceding financial year) Exempt to its members for consideration (maintenance charges) more than ₹ 7,500 per month per member 5. Services by an RWA (having turnover more than ₹ 20 lakh in the preceding Exempt T financial year) to its members for consideration (maintenance charges) upto ₹ 7,500 per month per member AN 6. Services by an RWA (having turnover more than ₹ 20 lakh in the preceding Taxable financial year) to its members for consideration (maintenance charges) more than ₹ 7,500 per month per member 7. Services provided by an unincorporated body or a non-profit entity registered Exempt under any law for the time being in force, engaged in: a. Activities relating to the welfare of industrial or agricultural labour or H farmers; or b. Promotion of trade, commerce, industry, agriculture, art, science, IS literature, culture, sports, education, social welfare, charitable activities and protection of environment to its own members against consideration in the form of membership fee upto an amount of ₹ 1,000 per member per year. N Notes: 1. RWAs are entitled to take ITC of GST paid by them on capital goods (generators, water pumps, lawn furniture, etc.), goods (taps, pipes, other sanitary/hardware fillings etc.) and input A services such as repair and maintenance services. 2. If a person owns two or more residential apartments in a housing society or a residential complex, he shall be treated to be a member of the RWA for each residential apartment owned C by him separately. The ceiling of ₹ 7,500 per month per member shall be applied separately for each residential apartment owned by him. For example, if a person owns two residential apartments in a residential complex and pays ₹ 15,000 per month as maintenance charges towards maintenance of each apartment to RWA (₹ 7,500 per month in respect of each residential apartment), the exemption from GST shall be available to each apartment. CA NISHANT KUMAR 21  3. If the maintenance charges exceed ₹ 7,500 per month per member, then the entire consideration is liable to GST, and not just the difference. Other Exempt Services Services Taxability 1. Services by way of transfer of a going concern, as a whole or an independent Exempt part thereof AR 2. Supply of services associated with transit cargo to Nepal and Bhutan Exempt (landlocked countries) (See Note 1) It is also clarified that movement of empty containers from Nepal and Bhutan, after delivery of goods there, is a service associated with the transit cargo to Nepal and Bhutan and is therefore covered by exemption. 3. Services by way of renting of residential dwelling for use as residence, except Exempt M where the residential dwelling is rented to a registered person. Explanation — For the purpose of exemption under this entry, this entry shall cover services by way of renting of residential dwelling to a registered person KU where, a. the registered person is proprietor of a proprietorship concern and rents the residential dwelling in his personal capacity for use as his own residence; and b. such renting is on his own account and not that of the proprietorship concern. 4. Services by way of renting of residential dwelling to a registered person, for use Taxable T as a residence Note: This is taxable under RCM. AN 5. Services by a hotel, inn, guest house, club or campsite, by whatever name Exempt called, for residential or lodging purposes, having value of supply of a unit of accommodation ≤ ₹ 1,000 per day 6. Services by way of giving on hire: Exempt a. To a state transport undertaking, a motor vehicle meant to carry more than 12 passengers, or H b. To a local authority, an Electrically operated vehicle meant to carry more than 12 passengers, or IS c. To a goods transport agency, a means of transportation of goods, or d. 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 N education and education upto higher secondary school or equivalent 7. Services by way of access to a road or a bridge on payment of toll charges Exempt 8. Overloading charges at toll plazas Exempt 9. Additional toll fees collected in the form of higher toll charges from vehicles not Exempt A having fastag 10. Commission on toll receipts Taxable 11. Service by way of access to a road or a bridge on payment of annuity Exempt C 12. Service by way of construction of road where considerations are received in Taxable deferred payment (annuity) 13. Transmission or distribution of electricity by an electricity transmission or Exempt distribution utility 14. Services by an electricity transmission or distribution utility such as: Taxable a. Application fee for releasing connection of electricity CA NISHANT KUMAR 22  b. Rental charges against metering equipment c. Testing fee for meters, transformers, capacitors, etc. d. Labour charges from customers for shifting of meters or shifting of service lines e. Charges for duplicate bill 15. Services provided by an incubatee up to a total turnover of ₹ 50,00,000 in a Exempt financial year subject to the following conditions: a. The total turnover had not exceeded ₹ 50 lakh during the preceding AR financial year; and b. A period of 3 years has not elapsed from the date of entering into an agreement as an incubatee (See Note 2) 16. Services by way of licensing, registration and analysis or testing of food samples Exempt supplied by the Food Safety and Standards Authority of India (FSSAI) to Food M Business Operators 17. Taxable services, provided or to be provided, by a Technology Business Exempt Incubator or a Science and Technology Entrepreneurship Park recognised by the National Science and Technology Entrepreneurship Development Board KU (NSTEDB) of the Department of Science and Technology, Government of India or bio-incubators recognised by the Biotechnology Industry Research Assistance Council, under the Department of Biotechnology, Government of India 18. Services by way of collecting or providing news by an independent journalist, Exempt Press Trust of India or United News of India T 19. Services of public libraries by way of lending of books, publications or any other Exempt knowledge-enhancing content or material 20. Services by an organiser to any person in respect of a business exhibition held Exempt AN outside India 21. Tour operator service, which is performed partly in India and partly outside Exempt India, supplied by a tour operator to a foreign tourist, to the extent of the value of the tour operator service which is performed outside India. Value of services performed outside India: Value of tour operator service H performed outside India shall be lower of the following: a. Total consideration charged for the entire tour × Number of days for which the tour is performed outside India ÷ Total number of days IS comprising the tour, or b. 50% of the total consideration charged for the entire tour In making the above calculations, any duration of time equal to or exceeding 12 hours shall be considered as one full day and any duration of time less than 12 N hours shall be taken as half a day. “Foreign Tourist” means a person not normally resident in India, who enters India for a stay of not more than six months for legitimate non-immigrant purposes. A 22. Services by way of slaughtering of animals Exempt 23. Services by a foreign diplomatic mission located in India Exempt C 24. Services by way of providing information under the Right to Information Act, Exempt 2005 25. Services provided to a recognised sports body by: Exempt a. An individual as a player, referee, umpire, coach or team manager for participation in a sporting event organised by a recognised sports body b. Another recognised sports body CA NISHANT KUMAR 23  26. Services in relation to sports by individuals such as selectors, commentators, Taxable curators, technical experts 27. Services provided by and to Federation Internationale de Football Association Exempt (FIFA) and its subsidiaries directly or indirectly related to any of the events under FIFA U-17 Women’s World Cup 2020 to be hosted in India whenever rescheduled. 28. Services provided by and to Asian Football Confederation (AFC) and its Exempt subsidiaries directly or indirectly related to any of the events under AFC AR Women’s Asia Cup 2022 to be hosted in India 29. Services by way of right to admission to the events organised under FIFA U-17 Exempt Women’s World Cup 2020, whenever rescheduled 30. Services by way of right to admission to the events organised under AFC Exempt Women’s Asia Cup 2022 M 31. Services by way of public conveniences such as provision of facilities of Exempt bathroom, washrooms, lavatories, urinal or toilets Notes: KU 1. A landlocked country is a country that does not have territory connected to an ocean. 2. Incubatee means an entrepreneur located within the premises of a Technology Business Incubator or Science and Technology Entrepreneurship Park recognised by the National Science and Technology Entrepreneurship Development Board (NSTEDB) of the Department of Science and Technology, Government of India and who has entered into an agreement with the Technology Business Incubator or the Science and Technology Entrepreneurship Park to T enable himself to develop and produce hi-tech and innovative products. AN Amendment in Relation to Inter-State Supply of Services [Entry 10 of Notification No. 9/2017 IT(R) dated 28.06.2017] 1. As per Entry 10 of Notification No. 9/2017, Services received from a provider of service located in a non-taxable territory by – (a) CG/SG/UT/LA/GA/ an individual in relation to any purpose other than commerce, industry H or any other business or profession; (b) an entity registered under section 12AA/12AB of the Income-tax Act, 1961 for the purposes of providing charitable activities; or IS (ba) way of supply of online educational journals or periodicals to an educational institution other than an institution providing services by way of: (i) pre-school education and education up to higher secondary school or equivalent; or N (ii) education as a part of an approved vocational education course; (c) a person located in a non-taxable territory. 2. However, the exemption shall not apply to – (i) OIDAR services received by persons specified in entry (a) or entry (b). ; or A (ii) services by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India received by persons specified in the entry. C 3. From 01-10-2023, sub-point (ii) or point (2) has been eliminated. 4. Therefore, the revised Entry 10 of Notification 9/2017 is: Services received from a provider of service located in a non-taxable territory by – (a) CG/SG/UT/LA/GA/ an individual in relation to any purpose other than commerce, industry or any other business or profession; (b) an entity registered under section 12AA/12AB of the Income-tax Act, 1961 for the purposes of providing charitable activities; or CA NISHANT KUMAR 24  (ba) way of supply of online educational journals or periodicals to an educational institution other than 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; (c) a person located in a non-taxable territory. 5. However, the exemption shall not apply to OIDAR services received by persons specified in entry (a) or entry (b). AR Important Questions: ALL Questions are Important M KU T AN H IS N A C CA NISHANT KUMAR 25