The CBIC issued Circular No. 234/28/2024-GST dated October 11, 2024, which provides essential clarifications regarding the applicability of GST on several services. These clarifications are based on the recommendations made during the 54th GST Council meeting held on September 9, 2024. The purpose of the circular is to address the prevailing confusion among field formations and taxpayers regarding the taxation of certain services.
Below is a detailed breakdown of the clarifications provided in the circular:
1. GST on Affiliation Services by Universities to Colleges
Universities provide affiliation services to colleges to ensure they meet the necessary infrastructure, faculty strength, financial liquidity, and other criteria required for conducting courses. These services are not related to student admission or examination services.
- Clarification: Affiliation services provided by universities to colleges are not exempt under Notification No. 12/2017-CT(R) dated June 28, 2017, and will attract an 18% GST rate.
2. GST on Affiliation Services by Educational Boards to Schools
Educational boards and councils provide affiliation services to schools, ensuring that schools meet required standards.
- Clarification: Affiliation services provided to schools by educational boards or councils are taxable. However, affiliation services provided to government schools (i.e., those controlled by the Central Government, State Government, or a local authority) are exempt from GST from October 10, 2024, as per Notification No. 08/2024-Central Tax (Rate).
- Past Regularization: GST paid on affiliation services from July 1, 2017, to June 17, 2021, has been regularized on an “as is where is” basis. This period covers the time before Circular No. 151/07/2021 clarified the taxability of these services.
3. GST on DGCA-Approved Flying Training Courses
Flying Training Organizations (FTOs) approved by the Directorate General of Civil Aviation (DGCA) conduct training courses for pilot licenses. The question arose regarding the GST applicability on such training courses.
- Clarification: DGCA-approved flying training courses conducted by FTOs fall under the exemption provided to educational institutions under Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate), and are thus exempt from GST.
4. GST on Passenger Transport by Helicopter
The GST Council recommended a 5% GST rate on the transportation of passengers by helicopter on a seat-share basis.
- Clarification: The 5% GST rate on passenger transport by helicopter on a seat-share basis is effective from October 10, 2024. For the period from July 1, 2017, to October 9, 2024, any GST paid is regularized on an “as is where is” basis.
- Charter Operations: Helicopter charter operations will continue to attract GST at 18%.
5. GST on Ancillary Services by Goods Transport Agencies (GTAs)
Incidental services such as loading, unloading, packing, and temporary warehousing provided by GTAs during the transportation of goods have been a matter of dispute.
- Clarification: Incidental services provided by GTAs as part of goods transportation are to be treated as a composite supply. These services will not attract a separate GST rate unless they are invoiced separately and not provided as part of transportation.
6. GST on Import of Services by Foreign Airlines’ Establishments
The GST Council recommended exempting the import of services by foreign airlines’ establishments from related entities abroad when made without consideration.
- Clarification: Services imported by an establishment of a foreign airline from a related person or another establishment outside India are exempt from GST when made without consideration, effective from October 10, 2024. GST paid from July 1, 2017, to October 9, 2024, is regularized on an “as is where is” basis.
7. GST on Preferential Location Charges (PLC)
PLC is often collected as part of the consideration for residential or commercial properties, leading to questions about its tax treatment.
- Clarification: PLC forms part of the composite supply of construction services and attracts the same GST rate as the construction service itself.
8. GST on Support Services by Electricity Transmission and Distribution Utilities
Services provided by utilities, such as meter testing, shifting of service lines, and issuing duplicate bills, are incidental to electricity supply.
- Clarification: These services are exempt from GST, effective from October 10, 2024. GST paid from July 1, 2017, to October 9, 2024, is regularized on an “as is where is” basis.
9. GST on Film Distribution Services
Transactions between distributors and exhibitors involving the grant of theatrical rights have caused confusion over the applicable GST rate.
- Clarification: GST at 18% applies to transactions involving theatrical rights between distributors and exhibitors. GST paid between July 1, 2017, and September 30, 2021, is regularized on an “as is where is” basis.
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