Clarifications on Levy of GST on Supply of Services issued by CBEC

by Priyanka Wadhera



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The CBEC has published some clarifications on the levy of supply of some services due to the reason that many Representations were received from trade and industry for clarification on certain issues regarding levy of GST on supply of services. Following Clarifications regarding levy of GST on accommodation services, betting and gambling in casinos, horse racing, admission to cinema, homestays, printing, legal services etc. are made by CBEC:

GST on Accomodation Services

Doubts for Clarification Clarifications

Will GST be charged on actual tariff or declared tariff for accommodation services? 

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).

What will be GST rate if cost goes up (more than declared tariff) owing to additional bed?

GST rate would be determined according to declared tariff for the room, and GST at the rate so determined would be levied on the entire amount charged from the customer. 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. 

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.

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.

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

Declared tariff at the time of supply would apply.

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/-

GST on the service of Admission into Casino 

Doubts for Clarification Clarifications

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%

(iv)…

(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.

GST on Service of Horse Racing

Doubts for Clarification Clarification
The tax base to levy GST on horse racing

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/-.

GST on Admission to Cinema Theatres

Doubts for Clarification Clarification

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. 

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

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%.

GST on Home Stays providing Accomodation

Doubts for Clarification Clarification

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.

GST on Printing Service

Doubts for Clarification Clarification

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.

GST on Legal Services

Doubts for Clarification Clarification

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.

You can Download the Clarifications Issued by CBEC with the below link:

Click here to Download

 

 



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