GST Rate changes for Services by 53rd GST Council Meeting

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In the 53rd GST Council meeting held on June 22, 2024, several significant decisions regarding GST rates on various services were announced. Among these decisions, the Council provided GST exemptions for services provided by Indian Railways, Special Purpose Vehicles (SPVs) associated with Indian Railways, and specific accommodation services. These exemptions aim to simplify taxation for service providers and benefit consumers. Other pending matters, such as GST on fertilizers, will be taken up in the next Council meeting scheduled for August 2024.




Read Detailed Press Release of 53rd GST Council meeting

The GST Council has made significant decisions regarding GST rates on various services:

1. Exemption of Services Provided by Indian Railways

  • Services provided by Indian Railways to the general public, such as sale of platform tickets, access to retiring rooms/waiting rooms, cloak room services, and battery-operated car services, will be exempt from GST. This exemption also applies to intra-railway transactions. Any issues related to past periods will be regularized from October 20, 2023, onwards until the issuance of the exemption notification.

2. Exemption of Services by Special Purpose Vehicles (SPV) to Indian Railways

  • GST will be exempted on services provided by Special Purpose Vehicles (SPVs) to Indian Railways. This includes allowing Indian Railways to use infrastructure owned by SPVs during the concession period and maintenance services provided by Indian Railways to SPVs. Past issues from July 1, 2017, until the issuance of the exemption notification will be regularized based on existing practices.

3. Exemption for Accommodation Services

  • A separate entry will be created under notification No. 12/2017-CTR dated June 28, 2017, to exempt accommodation services where the value of supply is up to Rs. 20,000 per month per person. This exemption applies when the accommodation service is provided for a minimum continuous period of 90 days. Similar benefits will be extended to past cases.

These decisions aim to simplify taxation on services provided by Indian Railways, SPVs associated with railways, and accommodation services, benefiting both service providers and consumers.

Know How to find Updated GST Rates, HSN & SAC

Other Changes in GST for Services

The GST Council has introduced several additional changes affecting services:

4. Co-insurance Premium in Co-insurance Agreements

  • Co-insurance premiums allocated by the lead insurer to the co-insurer in co-insurance agreements for the supply of insurance services may be treated as “no supply” under Schedule III of the CGST Act, 2017. Past cases will be regularized based on existing practices.

5. Ceding Commission/ Re-insurance Commission Transactions

  • Transactions of ceding commission or re-insurance commission between insurers and re-insurers may also be treated as “no supply” under Schedule III of the CGST Act, 2017. Past cases will be regularized accordingly.

6. Regularization of GST on Reinsurance Services

  • GST liability on reinsurance services for specified insurance schemes (covered under Sr. Nos. 35 & 36 of notification No. 12/2017-CT (Rate) dated June 28, 2017) will be regularized from July 1, 2017, to January 24, 2018, on an “as is where is” basis.

7. Regularization of GST on Government-Paid Premium Insurance Schemes

  • paid by the Government (covered under Sr. No. 40 of notification No. 12/2017-CTR dated June 28, 2017) will be regularized from July 1, 2017, to July 26, 2018, on an “as is where is” basis.

8. Clarification on Retrocession as Re-insurance of Re-insurance

  • Retrocession is clarified as “re-insurance of re-insurance” and therefore eligible for exemption under Sl. No. 36A of notification No. 12/2017-CTR dated June 28, 2017.

9. Exemption of Statutory Collections by Real Estate Regulatory Authority (RERA)

  • Statutory collections made by Real Estate Regulatory Authority (RERA) are exempt from GST, falling under entry 4 of notification No. 12/2017-CTR dated June 28, 2017.

10. Clarification on Incentive Sharing in RuPay Debit Cards and BHIM-UPI Transactions

  • Further sharing of incentives by acquiring banks with other stakeholders under the Incentive Scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions, as defined and managed by NPCI in consultation with participating banks, is not taxable.

These changes aim to clarify and streamline GST implications in the insurance sector, statutory collections by RERA, and incentive sharing in digital payment schemes. The Council’s decisions are expected to simplify tax compliance and provide clear guidelines for service providers and consumers alike.

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Pooja Gupta

CA Pooja Gupta (CA, ISA, M.com) having 15 years of experience. Educator and Digital Creator

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CA Pooja Gupta (CA, ISA, M.com) having 15 years of experience. Educator and Digital Creator

1 thought on “GST Rate changes for Services by 53rd GST Council Meeting”

  1. Would it be possible to make a representation to GST Council committee headed Mrs. Nirmala Seethraman Hon’ble Finance minister, Govt of India, NewDelhi based on the following draft contents on the subject.

    Representing for enhancement exemption limit from Rs.7500 for RWA (Residential.owners apartment association) – Budget 2024 expectations

    Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman

    Budget 2024 expectations that the govt to enhance the exemption limits of Residential welfare association COMON AREA MAINTENANCE

    The idea of an RWA is to work for the betterment of the homeowners by maintaing the facilities and ensuring the upkeep of the society’s every aspect of community life, from availability of civic amenities like water, sanitation, internal roads, parks and street lighting to procurement of funds.

    To run such activities, the housing society usually levies a maintenance fee from all residents.

    As per Entry 77 of the GST Exemption Notification, the maintenance charge paid by residents to the Resident Welfare Association (RWA) in a housing society is exempt from GST up to an amount of Rs. 7,500 per month per member.

    GST on Housing Society is exempt if the turnover of the housing society is up to ₹20 lakh and/or it levies not more than ₹20 lakhs in aggregate annual

    The applicability of Goods & Services Tax (GST) on the
    current limit of Rs.7500, and the same needs enhancement to Rs 15000 in the upcoming full budget.

    The above mentioned enhance ment is necessary to make as inflation and rising prices continue to affect, people are optimistic that the Centre will take steps to ease their financial burden.

    The GST for the average person, as many are hopeful for a revision that could result in lower tax obligations FOR APARTMENT OWNERS.

    No tax concessions were given to the residential apartment complex owners so far in the past ever since GST HAS levied

    The apartment owner to owners of apartment to receive tax relief on the inflation of high cost cleaning products, such as water procurement and hick in the electricity consumption chages, and on the diesel purchase price for GENSET powerback cost manpower cost,, Property – General Security Housekeeping Gardening
    Technical consulting charges
    Various Repairs & Maintenance AMC/Repairs & Maintenance of Lift, Fire Fighting & Safety applications
    Pest Control charges
    STP Maintenance cost
    Chillers Diesel Generator maintenance cost clubhouse
    Gym Equipment , maintenance of Swimming Pool, Water Treatment Plant, CCTV
    Organic waste crusaders
    Waste Hauling
    Plumbing & Sanitary c
    Sump & Tank Cleaning
    Landscape Maintenance
    General Civil Repairs & Material
    Electrical – Preventive Maintenance and General Repairs, reminding
    Pumps & Motors
    Electrical Inspectorate (CEIG)
    software, KSPCB renewal licence Premium on
    Building & Terrorism Insurance
    Consumables procurement
    Electrical Fittings + Bulbs/tubes & lamps
    Housekeeping Material
    Cleaning Equip/Spares
    Cleaning Chemicals
    Bins & Covers & mats
    Other Maint Expenses
    Office Expenses
    Communication Expenses
    Borewell Maintenance

    Other Contingency, suchas charted accountants fees accounts maintenance and association running expenses, office management etc are becoming nowadays more expensive.

    Adding all these cost together increased costs in the maintenance of apartment buildings property.

    So in view of this it is request that an exemption limit of Rs. 7500 may be raised to Rs. 25000 and the aggregate turnover limit of Rs. 20 lacks to Rs. 50 lacs.

    Regards
    Apartment owner
    Bengaluru

    Reply

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