SERVICES PROVIDED BY THE GOVERNMENT – EXEMPTION

[Mr. M. GOVINDARAJAN]

Vide Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017, which came into force with effect from 01.07.2017, the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, exempted 81 intra-State supply of services as is in excess of the tax calculated at the rate specified subject to the conditions.

In this Notification the Central Government has given exemption for the services provided by the Government.  For the purpose of this article, the term ‘Government’ may include the Central Government, State Government, Union territory or local authority or governmental authority.   The following services provided by the Government are exempted-

• The services by Central Government, State Government, Union Territory, local authority or governmental authorityby way of any activity in relation to any function entrusted to a municipality under article 243W of the Constitution;
• Services by the Central Government, State Government, Union territory or local authority excluding the following services-

• services by 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, Union territory;
• services in relation to an aircraft or a vessel, inside or outside the precincts of a part of an airport;
• transport of goods or passengers; or
• any service, other than services covered above, provided to business entities;

• Services provided by the Central Government, State Government, Union territory or local authority to a business entity with an aggregate turnover of up to R.20 lakhs (Rs.10 lakhs in case of a special category State) in the preceding financial year;For the purposes of this, it is clarified that this provision shall not be applicable to-

• Services-
  • services by 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, Union territory;
  • Services in relation to an aircraft or a vessel, inside or outside the precincts of a part of an airport;
  • transport of goods or passengers; and

• services by way of renting of immovable property;

• Services provided by the Central Government, State Government, Union territory or local authority to another Central Government, State Government, Union territory or local authority.

This entry is not applicable to services-

• services by 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, Union territory;
• Services in relation to an aircraft or a vessel, inside or outside the precincts of a part of an airport;
• Transport of goods or passengers.

• Services provided by Central Government, State Government, or a local authority for such services does not exceed ₹ 5000/-

Nothing of these provisions shall apply to-

• services by 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, Union territory;
• Services in relation to an aircraft or a vessel, inside or outside the precincts of a part of an airport;
• transport of goods or passengers;

In the case of continuous supply of services provided by the Central Government, State Government, Union territory or a local authority, the exemption shall apply only whether the consideration charged for such services does not exceed ₹ 5000/- in a financial  year

• Services provided by the Central Government, State Government, Union territory or local authority by way of allowing a business entity to operate as a telecom service provider or use of radio frequency spectrum during the period prior to01.04.2016 on payment of licence fee or spectrum over charges, as the case me;
• Services provided by the Central Government, State Government, Union territory or local authority by way of-
  • Registration required under any law for the time being in force;
  • Testing, calibration, safety check or certification relating to protection or supply of workers, consumers or public at large, including the first licnsor, required under any law for the time beingin force;
• Services provided by the Central Government,State Government, Union territory or local authority by way of issuance of passport, visa, driving licence, birth certificate or death certificate.
• Services provided by the Central Government, State Government, Union territory or local authority by way of tolerating non performance of a contract for which consideration of a contract for which consideration in the form files or liquidated damages as payable to the Central Government, State Government, Union territory or local authority under such contract;
• Services provided by the Central Government, StateGovernment, Union territory or local authority by way of assignment of right to use natural resources to an individual farmer for cultivation of plants and rearing of all life forms of animals, except the rearing of horses for food, fiber, fuel, raw material or other similar products;
• Services provided by the Central Government, State Government, Union territory or local authority by way of assignment of right to use any natural resource where such rights to use was assigned by the Central Government, State Government, Union territory or local authority before 01.04.2016.The exemption shall apply only to tax payable on one time charge payable, in full upfront or in installments,for the assignment of right to use such manufactural resources;
• Services provided by the Central Government, State Government, Union territory by way of deputing officers after officer hours or on holidays for inspection or container stuffing or such other duties in relation to import export cargo on payment of Merchant Overtime charges;
• Services provided by the Central Government, State Government, Union territory administration under any training programme for which total expenditure is borne by the Central Government, State Government, Union territory administration;