Decisions relating to Services in 23rd GST Council meeting at Guwahati

In the 23rd meeting of GST Council held at Guwahati, Assam on 10.11.2017, the following
decisions relating to exemptions / changes in GST rates / ITC eligibility criteria, rationalization of
rates / exemptions and clarification on levy of GST on services were taken. The information is
being uploaded immediately after the GST Councils decision and it will be subject to
further vetting during which the list may undergo some changes. The decisions of the GST
Council are being communicated for general information and will be given effect to through
Gazette notifications / circulars which shall have force of law.

EXEMPTIONS / CHANGES IN GST RATES / ITC ELIGIBILITY CRITERIA

1. All stand-alone restaurants irrespective of air conditioned or otherwise, will attract 5%

GST without ITC. Food parcels (or takeaways) will also attract 5% GST without ITC.
2. Restaurants in hotel premises having room tariff of less than Rs 7500 per unit per day will
attract GST of 5% without ITC.
3. Restaurants in hotel premises having room tariff of Rs 7500 and above per unit per day
(even for a single room) will attract GST of 18% with full ITC.
4. Outdoor catering will continue to be at 18% with full ITC.
5. GST on Services by way of admission to "protected monuments" will be exempted.
6. The rate of GST on job work services in relation to manufacture of those handicraft goods
in respect of which the casual taxable person has been exempted from obtaining
registration, shall be reduced to 5% with full ITC.

RATIONALIZATION OF EXEMPTION ENTRIES

7. The existing exemption entries with respect to services provided by Fair Price Shops to
Central Government, State Governments or Union territories by way of sale of food grains,
kerosene, sugar, edible oil, etc. under Public Distribution System (PDS) against
consideration in the form of commission or margin, is being rationalized so as to remove
ambiguity regarding list of items and the category of recipients to whom the exemption is
available.
8. In order to maintain consistency, entry at item (vi) of Sr. No.3 of notification No. 11/2017-
CT(R) will be aligned with the entries at items (ii), (iii), (iv) and (v) of SI.No.3. [The word
services in entry (vi) will be replaced with "Composite supply of Works contract as
defined in clause 119 of Section 2 of CGST Act, 2017"].

9. In order to obviate disputes and litigation, it is proposed to place-

(i) permanent transfer of Intellectual Property other than Information Technology
software in the goods rate of 12%; and

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 (ii) permanent transfer of Intellectual Property in respect of Information
Technology software in the goods rate list of 18%.

CLARIFICATIONS

10. It is proposed to clarify that credit of GST paid on aircraft engines, parts & accessories
will be available for discharging GST on interState supply of such aircraft engines, parts
& accessories by way of inter-state stock transfers between distinct persons as specified
in section 25 of the CGST Act, notwithstanding that credit of input tax charged on
consumption of such goods is not allowed for supply of service of transport of passengers
by air in economy class at GST rate of 5%.

11. A suitable clarification will be issued by way of a Circular that processed products such
as tea (i.e. black tea, white tea etc.), processed coffee beans or powder, pulses (de-husked
or split), jiggery, processed spices, processed dry fruits, processed cashew nuts etc. fall
outside the definition of agricultural produce given in notification No. 11/2017-CT(R) and
12/2017-CT(R) and therefore the exemption from GST is not available to their loading,
packing, warehousing etc.

12. A suitable clarification is being issued that (i) services provided to the Central
Government, State Government, Union territory under any insurance scheme for which
total premium is paid by the Central Government, State Government, Union territory are
exempt from GST under Sl. No. 40 of notification No. 12/2017-Central Tax (Rate); (ii)
services provided by State Government by way of general insurance (managed by
government) to employees of the State government/ Police personnel, employees of
Electricity Department or students are exempt vide entry 6 of notification No. 12/2017-
CT(R) which exempts Services by Central Government, State Government, Union
territory or local authority to individuals.
These changes will come into force with effect from 14/15th November, 2017, to be effective from
00:00 hrs on 15th November, 2017.