Clarifications regarding GST in respect of certain services as decided in 25th GST Council meeting.

S.

No.

Issue

Clarification

1.

Is hostel accommodation provided by

Trusts to students covered within the

definition of Charitable Activities and

thus, exempt under Sl. No. 1 of

notification No. 12/2017-CT (Rate).

Hostel accommodation services do not fall

within the ambit of charitable activities as

defined in para 2(r) of notification No.

12/2017-CT(Rate). However, services by a

hotel, inn, guest house, club or campsite,

by whatever name called, for residential or

lodging purposes, having declared tariff of

a unit of accommodation below one

thousand rupees per day or equivalent are

exempt. Thus, accommodation service in

hostels including by Trusts having

declared tariff below one thousand rupees

per day is exempt. [Sl. No. 14 of

notification No. 12/2017-CT(Rate) refers]

2.

Is GST leviable on the fee/amount

charged in the following

situations/cases: –

(1) A customer pays fees while

registering complaints to Consumer

Disputes Redressal Commission

office and its subordinate offices.

Services by any court or Tribunal

established under any law for the time

being in force is neither a supply of goods

nor services. Consumer Disputes Redressal

Commissions (National/ State/ District)

may not be tribunals literally as they may

not have been set up directly under Article

These fees are credited into State

Customer Welfare Fund’s bank

account.

(2) Consumer Disputes Redressal

Commission office and its

subordinate offices charge penalty

in cash when it is required.

(3) When a person files an appeal to

Consumers Disputes Redressal

Commission against order of

District Forum, amount equal to

50% of total amount imposed by the

District Forum or Rs 25000/-

whichever is less, is required to be

paid.

323B of the Constitution. However, they

are clothed with the characteristics of a

tribunal on account of the following: –

(1) Statement of objects and reasons as

mentioned in the Consumer Protection

Bill state that one of its objects is to

provide speedy and simple redressal to

consumer disputes, for which a quasijudicial

machinery is sought to be set

up at District, State and Central levels.

(2) The President of the District/

State/National Disputes Redressal

Commissions is a person who has

been or is qualified to be a District

Judge, High Court Judge and Supreme

Court Judge respectively.

(3) These Commissions have been vested

with the powers of a civil court under

CPC for issuing summons, enforcing

attendance of defendants/witnesses,

reception of evidence,

discovery/production of documents,

examination of witnesses, etc.

(4) Every proceeding in these

Commissions is deemed to be judicial

proceedings as per sections 193/228 of

IPC.

(5) The Commissions have been deemed

to be a civil court under CrPC.

(6) Appeals against District Commissions

lie to State Commission while appeals

against the State Commissions lie to

the National Commission. Appeals

against National Commission lie to

the Supreme Court.

In view of the aforesaid, it is hereby

clarified that fee paid by litigants in the

Consumer Disputes Redressal

Commissions are not leviable to GST. Any

penalty imposed by or amount paid to these

Commissions will also not attract GST.

3.

Whether the services of elephant or

camel ride, rickshaw ride and boat ride

Elephant/ camel joy rides cannot be

classified as transportation services. These

should be classified under heading

9964 (as passenger transport service) in

which case, the rate of tax on such

services will be 18% or under the

heading 9996 (recreational, cultural and

sporting services) treating them as joy

rides, leviable to GST@ 28%?

services will attract GST @ 18% with

threshold exemption being available to

small service providers. [Sl. No 34(iii) of

notification No. 11/2017-CT(Rate) dated

28.06.2017 as amended by notification No.

1/2018-CT(Rate) dated 25.01.2018 refers]

4.

What is the GST rate applicable on

rental services of self-propelled access

equipment (Boom Scissors/

Telehandlers)? The equipment is

imported at GST rate of 28% and leased

further in India where operator is

supplied by the leasing company, diesel

for working of machine is supplied by

customer and transportation cost

including loading and unloading is also

paid by the customer.

Leasing or rental services, with or without

operator, for any purpose are taxed at the

same rate of GST as applicable on supply

of like goods involving transfer of title in

goods. Thus, the GST rate for the rental

services in the given case shall be 28%,

provided the said goods attract GST of

28%. IGST paid at the time of import of

these goods would be available for

discharging IGST on rental services. Thus,

only the value added gets taxed. [Sl. No

17(vii) of notification No. 11/2017-

CT(Rate) dated 28.6.17 as amended

refers].

5.

Is GST leviable in following cases:

(1) Hospitals hire senior doctors/

consultants/ technicians

independently, without any contract

of such persons with the patient; and

pay them consultancy charges,

without there being any employeremployee

relationship. Will such

consultancy charges be exempt from

GST? Will revenue take a stand that

they are providing services to

hospitals and not to patients and

hence must pay GST?

(2) Retention money: Hospitals charge

the patients, say, Rs.10000/- and pay

to the consultants/ technicians only

Rs. 7500/- and keep the balance for

providing ancillary services which

include nursing care, infrastructure

facilities, paramedic care,

emergency services, checking of

temperature, weight, blood pressure

Health care services provided by a clinical

establishment, an authorised medical

practitioner or para-medics are exempt. [Sl.

No. 74 of notification No. 12/2017-

CT(Rate) dated 28.06.2017 as amended

refers].

(1) Services provided by senior doctors/

consultants/ technicians hired by the

hospitals, whether employees or not,

are healthcare services which are

exempt.

(2) Healthcare services have been defined

to mean any service by way of

diagnosis or treatment or care for

illness, injury, deformity, abnormality

or pregnancy in any recognised

system of medicines in India[para

2(zg) of notification No. 12/2017-

CT(Rate)]. Therefore, hospitals also

provide healthcare services. The

entire amount charged by them from

the patients including the retention

etc. Will GST be applicable on such

money retained by the hospitals?

(3) Food supplied to the patients:

Health care services provided by the

clinical establishments will include

food supplied to the patients; but

such food may be prepared by the

canteens run by the hospitals or may

be outsourced by the Hospitals from

outdoor caterers. When outsourced,

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.

money and the fee/payments made to

the doctors etc., is towards the

healthcare services provided by the

hospitals to the patients and is exempt.

(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.

6.

Appropriate clarification may be issued

regarding taxability of Cost Petroleum.

As per the Production Sharing

Contract(PSC) between the Government

and the oil exploration & production

contractors, in case of a commercial

discovery of petroleum, the contractors are

entitled to recover from the sale proceeds

all expenses incurred in exploration,

development, production and payment of

royalty. Portion of the value of petroleum

which the contractor is entitled to take in a

year for recovery of these contract costs is

called “Cost Petroleum”.

The relationship of the oil

exploration and production contractors

with the Government is not that of partners

but that of licensor/lessor and

licensee/lessee in terms of the Petroleum

and Natural Gas Rules, 1959. Having

acquired the right to explore, exploit and

sell petroleum in lieu of royalty and a share

in profit petroleum, contractors carry out

the exploration and production of

petroleum for themselves and not as a

service to the Government. Para 8.1 of the

Model Production Sharing Contract

(MPSC) states that subject to the

provisions of the PSC, the Contractor shall

have exclusive right to carry out Petroleum

Operations to recover costs and expenses

as provided in this Contract. The oil

exploration and production contractors

conduct all petroleum operations at their

sole risk, cost and expense. Hence, cost

petroleum is not a consideration for service

to GOI and thus not taxable per se.

However, cost petroleum may be an

indication of the value of mining or

exploration services provided by operating

member to the joint venture, in a situation

where the operating member is found to be

supplying service to the oil exploration and

production joint venture.