07 April 2021
Is honorarum paid by Government of Telangana State, to a retired paramilatary person aged more than 75 years who is giving his services in training the Elite Forces ( Special Protecton Forces) in the State of Telangana, covered under service Tax and GST or exempted from any Taxes. Honorarium received in Telangana State and Show cause notice given by Rajasthan GST wing. Please clarify.
07 July 2024
The payment of honorarium by the Government of Telangana to a retired paramilitary person, aged more than 75 years, for training Elite Forces (Special Protection Forces) falls under specific considerations regarding service tax or GST applicability. Here’s the clarification:
### Service Tax and GST Applicability
1. **Service Tax (pre-GST regime)**: - Service tax was applicable on specified services provided or agreed to be provided by a person to another and was governed by the Finance Act, 1994. - Certain services provided to the government or local authorities were exempt from service tax, subject to conditions.
2. **GST (post-GST regime)**: - Under GST, services provided by way of training or coaching in recreational activities or sports are exempted if provided to a registered non-profit entity. - Services provided to the government, local authorities, or governmental authority are generally exempted under GST, subject to certain conditions.
### Specific Consideration for Honorarium
- **Retired Paramilitary Person**: Since the person providing the training is a retired paramilitary person, the nature of service provided (training Elite Forces) needs to be considered. - **Age and Service Nature**: The fact that the person is over 75 years old does not necessarily exempt the honorarium from service tax or GST unless specific exemptions apply under the law.
### Show Cause Notice from Rajasthan GST Wing
- The show cause notice from Rajasthan GST wing indicates a potential query or dispute regarding the taxability of the honorarium received in Telangana State. - It is essential to review the specific details mentioned in the notice to understand the exact grounds on which the notice has been issued.
### Clarification and Action
To determine the exact tax treatment:
- **Consultation**: It is advisable to consult with a tax expert or legal advisor who can review the specific nature of services provided, the applicable exemptions or notifications under GST, and any previous rulings or clarifications. - **Exemption Notifications**: Check if there are specific notifications or exemptions applicable to honorarium paid to retired personnel for training services. - **Response to Show Cause Notice**: Respond to the show cause notice with detailed explanations, supporting documents, and legal interpretations to clarify the tax treatment.
Given the complexity and specific nature of your situation, seeking professional advice will ensure compliance with GST regulations and appropriate handling of the show cause notice from the Rajasthan GST wing.
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