TMI BlogActivity or Transaction - Section 7(1A) read with Schedule II - whether it is Supply of Goods or ServicesX X X X Extracts X X X X X X X X Extracts X X X X ..... h a separate consideration is charged. The Securities and Money are excluded from the definition of goods as well as that of services but Services includes facilitating or arranging transactions in securities or separate consideration is charged for conversion of money from one form to another form denomination. Read along with the definition of Goods services, Schedule II provide clarification regarding Which is the goods or services for taxability of GST Certain activity or transaction defined in Schedule II whether it is Supply of Goods or Services As per para 1 of Schedule II of CGST Act (a) Transfer of title to goods - Supply of goods: - As per para 1 of Schedule II of CGST Act Transfer of title to goods, which have been identified in the contract of sale, passes form the seller to the buyer in any manner and on any conditions agreed upon by the parties to the contract of sale. The basic Rule is that the title of goods passes, when the parties intend the same to pass. Example: - M/s ABC, a plastic dealer sells plastic material to Mr. B for INR 15000. It is a case of transfer of title in the goods. (b) Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the risks and rewards incident to ownership of an asset. Risks include the possibilities of losses from idle capacity or technological obsolescence and of variations in return due to changing economic conditions. Rewards may be represented by the expectation of profitable operation over the economic life of the asset and of gain from appreciation in value or realisation of residual value. An operating lease is a lease other than a finance lease. This Standard should be applied in accounting for all leases other than: lease agreements to explore for or use natural resources, such as oil, gas, timber, metals and other mineral rights; and licensing agreements for items such as motion picture films, video recordings, plays, manuscripts, patents and copyrights; and lease agreements to use lands. A finance lease or an operating lease depends on the substance of the transaction rather than its form. Examples of situations which would normally lead to a lease being classified as a finance lease are: The lease transfers ownership of the asset to the lessee by the end of the lease term; The lessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over the leasing of Land to a car showroom for the purpose of parking of car or for dumping of scrap or waste etc. Important Clarification Issue related to taxability of tenancy rights under GST [ Circular No. 44/18/2018-CGST Dated 2nd May, 2018 ] 1. The activity of transfer of tenancy right against consideration in the form of tenancy premium is a supply of service liable to GST . It is a form of lease or renting of property and such activity is specifically declared to be a service in para 2 of Schedule II i.e. any lease, tenancy, easement, licence to occupy land is a supply of services. 2. The contention that stamp duty and registration charges is levied on such transfers of tenancy rights, and such transaction thus should not be subjected to GST , is not relevant. Merely because a transaction or a supply involves execution of documents which may require registration and payment of registration fee and stamp duty, would not preclude them from the scope of supply of goods and services and from payment of GST. 3. Hence, grant of tenancy rights in a residential dwelling for use as residence dwelling against tenancy premium or periodic r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny debt owned by the taxable person, the goods shall be deemed to be supply of goods by the taxable person in the course of furtherance of business of his and would be covered in this clause. Like Banking company selling the goods /assets of the company to recover the debts from the taxable person Liquidator appointed either by the creditors or by the shareholder and selling the goods /business assets, to pay the debts of the company. (i) Transfer of usage of Business assets - Supply of service : This clause covers the transfer of Business goods for non-business purpose. This clause covers only the cases where the goods are temporarily transferred. It states that transfer of goods shall be treated as supply of service, if following condition are satisfied: There should be goods held or used for the purpose of the Business. These goods should be put to any private use or are used, or made available to any person. These goods are used for any purpose other than a purpose of Business. This clause cover only those cases where goods are temporarily transferred. If the goods are permanently transferred, it would be fall under clause 4(a) of schedule II and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all, open area etc. is Rs. 10,000 or more per day, The rent for shops or commercial spaces is Rs. 10,000 or more per day Example: - Mr. GK gives a parking space on rent of INR 50,000/- per month to M/s ABC. (l). Construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier - Supply of Service. The expression competent authority means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely: - (i) an architect registered with the Council of Architecture constituted under the Architects Act, 1972 ; or (ii) a chartered engineer registered with the Institution of Engineers (India); or (iii) a licensed surveyor of the respective local body of the city or town or village or development or planning authority. The expre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IPR is Taxable under GST: Both the permanent transfer of IPR and temporary transfer are subject to GST. Temporary transfer includes permitting use or enjoyment of IPR. (n). Development, design, programming, customization, adaptation, upgradation, enhancement, implementation of information technology software - Supply of service - This entry mainly covers the customized software (i.e., uncanned software). However, the law is silent about the canned software, which is generally sold through a medium, such as DVD, pen drive etc. Meaning of the term information technology software as per explanation in clause no. 4 of N. No. 11/2017-CT-(R) dated 28 June 2017 and Education guide released by CBEC 2012 [Para 6.4] information technology software means any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form, and capable of being manipulated or providing interactivity to a user, by means of a computer or an automatic data processing machine or any other device or equipment Would sale of pre-packaged or canned software be included in this entry? No. It is a settled position of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A supply of service is said to be made when a person does something, or agrees to do something for a consideration, would be treated as provision of services refrain from doing something or gives up a right for consideration which also includes grant, assignment or surrender of any rights. Under this scope, following activities are included: Demurrage charges for not clearing goods within prescribed period. Cancellation charges charged by Hotel and airlines. Liquidated damages recovered by Builders and Contractors. Non-Compete fees payable for agreeing not to compete for particular period. Forfeiture of deposit or advance as penalty (Like quality, late delivery, violation of any terms of contract) Penalty for breach of contract. Refundable security deposit is not taxable, however if deposit is forfeited then it would be taxable Applicability of GST on payments in the nature of liquidated damage, compensation, penalty, cancellation charges, late payment surcharge etc. arising out of breach of contract or otherwise and scope of the entry at para 5 (e) of Schedule II of CGST Act, 2017 [ Circular No. 178/10/2022-GST dated 03.08.2022 ] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. The Works contract in relation to movable property under the post-GST regime shall be evaluated under the concepts of 'mixed supplies' and 'composite supplies'. As per section 17(5) (c) of the CGST Act, 2017 , input tax credit shall not be available in respect of the works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of work contract services. (r). Composite Supply of foods and beverage - Supply of service: Composite supply - Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service for cash, deferred payment of other valuable consideration. Rate of CGST tax on Accommodation, food and beve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een taken [Please refer to Explanation (iv)] (vi) Accommodation, food and beverage services other than (i) to (v) above Explanation: (a) For the removal of doubt, it is hereby clarified that, supplies covered by items (ii), (iii), (iv) and (v) in column (3) shall attract central tax prescribed against them in column (4) subject to conditions specified against them in column (5), which is a mandatory rate and shall not be levied at the rate as specified under this entry. (b) This entry covers supply of restaurant service at specified premises (c) This entry covers supply of hotel accommodation having value of supply of a unit of accommodation above 7,500/- Rupees per unit per day or equivalent. (d) This entry covers supply of outdoor catering , provided by suppliers providing hotel accommodation at specified premises , or suppliers located in specified premises . (e) This entry covers composite supply of outdoor catering together with renting of premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organising a function) provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, there should be no ambiguity that the suppliers shall charge tax as applicable and hospital will get no ITC. If hospitals have their own canteens and prepare their own food; then no ITC will be available on inputs including capital goods and in turn if they supply food to the doctors and their staff; such supplies, even when not charged, may be subjected to GST. (3) Food supplied to the in-patients as advised by the doctor/nutritionists is a part of composite supply of healthcare and not separately taxable. Other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable. GST rate applicable on supply of food and beverage services by educational institution [ Circular No. 85/04/2019- GST Dated 1st January, 2019 ] Supply of all services by an educational institution t o its students, faculty and staff is exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, Sl. No. 66. Such services include supply of food and beverages by an educational institution to its students, faculty and staff. As stated in explanation 3 (ii) to Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purview of GST and therefore not taxable? In Reserve Bank of India FAQ on PSLC, it has been mentioned that PSLC may be construed to be in the nature of goods , dealing in which has been notified as a permissible activity under section 6(1) of the Banking Regulation Act, 1949 vide Government of India notification dated 4th February, 2016. PSLC are not securities. PSLC are akin to freely tradeable duty scrips, Renewable Energy Certificates, REP license or replenishment license, which attracted VAT. In GST there is no exemption to trading in PSLCs . Thus, PSLCs are taxable as goods at standard rate of 18% under the residuary S. No. 453 of Schedule III of notification No. 1/2017-Central Tax(Rate) . GST payable on the certificates would be available as ITC to the bank buying the certificates. [ Circular No. 34/8/2018-GST Dated 1 st March 2018 ] Applicable GST rate on Priority Sector Lending Certificates (PSLCs), Renewable Energy Certificates (RECs) and other similar scrips [ Circular No. 46/20/2018-GST Dated 6th June, 2018 ] Accordingly, in modification of S.No. 3 of Circular No. 34/8/2018- GST dated 01.03.2018 , it is hereby clarified that Renewabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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