Indirect Tax Alert - Rate changes/rationalisation on goods/services

Rate changes in services

S. No.	Description	Old Rate	New Rate
1.	Transport of goods and passengers by ropeways	18%	5% (with  ITC of  services)
2.	Renting of truck/goods carriage where the cost of fuel is included	18%	12%
3.	Services provided by a clinical establishment by way of providing room [other than Intensive Care Unit (ICU)/Critical Care Unit (CCU)/Intensive Cardiac Care Unit (ICCU)/Neonatal Intensive Care Unit (NICU)] having room charges exceeding INR. 5000 per day to a person receiving health care services.	Nil	5%( The credit of input tax charged on goods and services used in supplying the service has not been taken)
4.	Services supplied by the foreman to chit fund	12%	18%
5.	Job work in relation to the processing of hides, skins and leather	5%	12%
6.	Job work in relation to the manufacture of leather goods  and footwear	5%	12%
7.	Job work in relation to the manufacture of clay bricks	5%	12%
8.	Works contract for roads, bridges, railways, metro, monorail effluent treatment plant, crematorium etc.	12%	18%
9.	Works contracts supplied to central and state governments, local authorities for historical monuments, canals, dams, pipelines, plants for water supply, educational institutions, hospitals etc. & sub-contractor thereof.	12%	18%
10.	Works contract supplied to central and state governments, union territories & local authorities involving predominantly earthwork and sub-contracts thereof.	5%	12%
11.	Services by way of treatment or disposal of biomedical waste or the processes incidental thereto by a common bio-medical waste treatment facility to a clinical establishment	Nil	12%

[Notification no:3/2022-Central Tax (Rate) dated 13 July 2022]

Rationalisation of exemptions on specified services

• All taxable services of the department of posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than the Central Government, State Government, or Union territory would be subject to forwarding charge. Hitherto certain taxable services of the department of the post were taxed on an RCM basis;
• Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having a value of supply of a unit of accommodation below or equal to INR 1000 per day or equivalent taxable at 12%.
• Exemption on the transport of passengers by air to and from North Eastern states & Bagdogra is being restricted to economy class.
• Exemption on the following services is being withdrawn-
  • Transportation by rail or a vessel of railway equipment and material.
  • Services provided by a GTA, by way of transport in a goods carriage, where consideration charged for the transportation of goods on a consignment transported in a single carriage does not exceed INR. 1500;
  • Services provided by a GTA, by way of transport in a goods carriage, where consideration charged for transportation of all such goods for a single consignee does not exceed INR. 750.
  • Storage or warehousing of commodities which attract tax (nuts, spices, copra, jaggery, cotton etc.)
  • Fumigation in a warehouse of agricultural produce.
  • Services by way of slaughtering of animals.
  • Services by RBI,IRDA,SEBI,FSSAI, GSTN.
  • Renting a residential dwelling to business entities (registered persons).
  • Services provided by the cord blood banks by way of preservation of stem cells or any other service about such preservation.

• Exemption on services by the Department of Posts by way of a postcard, inland letter, book post and ordinary post (envelopes weighing less than 10 grams).
• Exemption on service provided by the Indian tour operator to a foreign resident for a tour partially in India and partially outside India is to be subject to tax proportionate to the tour conducted in India for such foreign tourist subject to conditions that this concession does not exceed half of the tour duration.
  • Provided further that 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 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.
• Exemption on training or coaching in recreational activities relating to arts or culture, or sports is being restricted to such services when supplied by an individual.
• The exemption on services by way of right to admission to the events organised under FIFA U-17 Women's World Cup 2020 has been given, whenever it is rescheduled;

[Notification no:4/2022-Central Tax (Rate) dated 13 July 2022]

Changes to RCM levy  

The provisions of RCM will not apply to a GTA in the following cases:

• The supplier has taken registration under the CGST Act, 2017 and exercised the option to pay tax on the services of GTA about the transport of goods supplied by him under forwarding charge; and
• The supplier has issued a tax invoice to the recipient charging GST at the applicable rates and has made a declaration as prescribed in Annexure III of the notification on such invoice issued by him. A declaration form is also prescribed for those who decide to opt to pay GST under the forwarding charge.
• Removed the services by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Central Government, State Government or Union territory or local authority from the purview of RCM.
• Included service by way of renting a residential dwelling to a registered person in the purview of RCM.

[Notification no:5/2022-Central Tax (Rate) dated 13 July 2022]

Rate changes on goods

S. No.	Description	Old Rate	New Rate
1.	Curd, Lassi, Buttermilk, pre-packaged and labelled	Nil	5%
2.	Jaggery of all types including Cane Jaggery (gur), Palmyra Jaggery, pre-packaged and labelled; Khandsari Sugar, pre-packaged and labelled	Nil	5%
3.	Puffed rice, commonly known as Muri, flattened or beaten rice, commonly known as Chira, parched rice, commonly known as Khoi, parched paddy or rice coated with sugar or gur, commonly known as Murki, pre-packaged and labelled;	Nil	5%
4.	Mango under CTH 0804, including mango pulp (other than mangoes sliced, dried)	Nil	12%
5.	All Goods, including printing ink, writing or drawing ink and other inks, whether or not concentrated or solid, fountain pen ink, ball pen ink	12%	18%
6.	Knives with cutting blades, paper knives, pencil sharpeners and blades, therefore, spoons, forks, ladles, skimmers, cake servers etc	12%	18%
7.	Power-driven pumps primarily designed for handling water such as centrifugal pumps, deep tube-well turbine  pumps, submersible pumps, bicycle pumps	12%	18%
8.	Machines for cleaning, sorting, or grading, seed, grain pulses; machinery used in the milling industry or for the working of cereals etc; Pawan chakki which is air-based atta chakki; wet grinder	5%	18%
9.	Machines for cleaning, sorting, or grading eggs, fruit or other agricultural produce and its parts, milking machines and dairy machinery	12%	18%
10	LED Lamps, lights and fixtures, their metal printed circuits board	12%	18%
11	Drawing and marking out instruments	12%	18%
12	Solar Water Heater and system	5%	12%
13	Prepared/finished leather/chamois leather/ composition leathers	5%	12%
14	Ostomy appliances	12%	5%
15	Tetra Pak (Aseptic packaging paper)	12%	18%
16	Tar (whether from coal, coal gasification plants, producer gas plants or coke oven plants.	5%/18%	18%
17	Cut and polished diamonds	0.25%	1.5%
18	Cheques, lost or in book form	Nil	18%
19	Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed	Nil	12%
19	Parts of goods of heading 8801	Nil	18%
20	E-waste	5%	18%
21	Scientific and technical instruments supplied to public funded research institutes	5%	Applicable  rate

Note: Wherever rate is prescribed on the condition that “put up in a unit container and bearing a registered brand name or bearing a brand name on which an actionable claim or enforceable right in a court of law is available other than those where any actionable claim or enforceable right in respect of such brand name has been foregone voluntarily, subject to the conditions as in the ANNEXURE”, it has been changed  “as pre-packaged and labelled”. Revised the scope of exemptions given to different goods to exclude pre-packaged and pre-labelled retail packs in terms of the Legal Metrology Act from it;

[Notification no:6 and 7/2022-Central Tax (Rate) dated 13 July 2022]

Withdrawal exemption in form of a concessional rate of GST on Petroleum/ Coal bed methane

The rate of GST charged on the following description of goods has increased from 5% to 12%. Goods specified in the list annexed to notification no:3/2017-CT(R) dated 28 June 2017 in connection with:

• Petroleum operations undertaken under petroleum exploration licenses or mining leases, granted by the Government of India or any State Government to the Oil and Natural Gas Corporation or Oil India Limited on a nomination basis, or
• Petroleum operations undertaken under specified contracts, or
• Petroleum operations are undertaken under specified contracts under the New Exploration Licensing Policy, or
• Petroleum operations undertaken under specified contracts under the Marginal Field Policy (MFP), or
• Coal bed methane operations are undertaken under specified contracts under the Coal Bed Methane Policy.
• Petroleum operations or coal bed methane operations are undertaken under specified contracts under the Hydrocarbon Exploration Licensing Policy (HELP) or Open Acreage Licensing Policy (OALP)]

[Notification no:8/2022-Central Tax (Rate) dated 13 July 2022]

Refund restricted on accumulated ITC on edible oils & coal

Refund of unutilised ITC, where the credit has accumulated on account of Inverted duty structure (other than nil rated or fully exempt supplies), is not allowed on the following list of goods.

Sl No.	HSN	Description
1	1507	Soya-bean oil and its fractions, whether or not refined, but not chemically Modified
2	1508	Ground-nut oil and its fractions, whether or not refined, but not chemically modified.
3	1509	Olive oil and its fractions, whether or not refined, but not chemically modified.
4	1510	Other oils and their fractions, obtained solely from olives, whether or not refined, but not chemically modified, including blends of these oils or fractions with oils or fractions of heading 1509
5	1511	Palm oil and its fractions, whether or not refined, but not chemically modified.
6	1512	Sunflower-seed, safflower or cotton-seed oil and fractions thereof, whether or not refined, but not chemically modified.
7	1513	Coconut (copra), palm kernel or babassu oil and fractions thereof, whether or not refined, but not chemically modified.
8	1514	Rape, colza or mustard oil and fractions thereof, whether or not refined, but not chemically modified.
9	1515	Other fixed vegetable or microbial fats and oils (including jojoba oil) and their fractions, whether or not refined, but not chemically modified
10	1516	vegetable fats and oils and their fractions, partly or wholly hydrogenated, interesterified, reesterified or elaidinised, whether or not refined, but not further prepared.
11	1517	Edible mixtures or preparations of vegetable fats or vegetable oils or of fractions of different vegetable fats or vegetable oils of this Chapter, other than edible fats or oils or their fractions of heading 1516
12	1518	Vegetable fats and oils and their fractions, boiled, oxidised, dehydrated, sulphurised, blown, polymerised by heat in vacuum or inert gas or otherwise chemically modified, excluding those of heading 1516
13	2701	Coal; briquettes, ovoids and similar solid fuels manufactured from coal
14	2702	Lignite, whether or not agglomerated, excluding jet
15	2703	Peat (including peat litter), whether or not agglomerated”

 

[Notification no:9/2022-Central Tax (Rate) dated 13 July 2022]

All fly ash bricks attract the same concessional rate irrespective of fly ash content

All fly ash bricks attract the same concessional rate of GST at the rate of 6% irrespective of fly ash content.

[Notification no:10/2022-Central Tax (Rate) dated 13 July 2022]

Exemption on import of Diethylcarbamazine (DEC) tablets

CBIC has exempted IGST on the import of Diethylcarbamazine (DEC) tablets supplied free of cost for National Filariasis Elimination Programme.

[Notification no:40/2022-Customs dated 13 July 2022]

Exemption on import of defence related goods

CBIC has extended the Customs duty exemption on the import of defence equipment and their parts to entities other than public sector entities also.

[Notification no:41/2022-Customs dated 13 July 2022]

Withdrawn exemption from IGST on research equipment imported by public-funded research institutions

CBIC has withdrawn exemption from IGST on import of research equipment by public funded research institutions or a university of an Indian Institute of Technology or Indian Institute of Science, Bangalore or Regional Engineering College, non-commercial institutions etc.

[Notification no:42/2022-Customs dated 13 July 2022]

 

Subscribe to receive the latest BDO News and Insights

Please fill out the following form to access the download.