1. Amnesty Scheme for filing appeal
The government has vide NN 53/2023-CT dated 2-11-2023 provided an Amnesty Scheme for taxpayers -
a. Who could not file an appeal under Sec 107 of the CGST Act, 2017 or
b. Whose appeal against the order was rejected solely on the grounds that the said appeal was not filed within the time period specified in Sec 107(1)
Sec 107 states that appeal lies against any order of the adjudicating authority before the Appellate Authority. However, the government has made a conditional amnesty scheme and stated that only following orders are covered under it -
c. Orders under section 73 or 74 of the CGST Act, 2017 and
d. Passed on or before 31st March, 2023.
Meaning thereby that other orders of the department against the taxpayers like cancellation of registration, order not granting registration, order not approving revocation of registration and refund ordersetc. is not available for the amnesty scheme.
2. Job Work Services
The CBIC has clarified vide Circular No. 206/18/2023-GST dated 31-10-2023 that job work services for barley processing into malt attracts GST @5% as applicable to "job work in relation to food and food products” and not 18%.
Reason is simple,Malt is a food product. It can be directly consumed as part of food preparations or can be used as an ingredient in food products and also used for the manufacture of beer and alcoholic liquor for human consumption. However, irrespective of end-use, conversion of barley into malt amounts to job work in relation to food products.
3. Electricity Charges collected as a reimbursement
The CBIC has clarified through Circular No. 206/18/2023-GST dated 31-10-2023 that where the electricity is supplied by the Real Estate Owners, Resident WelfareAssociations (RWAs), Real Estate Developers etc., as a pure agent, it will not form part of valueof their supply. Further, where they charge for electricity on actual basis that is, they charge the same amount for electricity from their lessees or occupants as charged by the State ElectricityBoards or DISCOMs from them, they will be deemed to be acting as pure agent for this supply.
However, it has also been clarified that whenever electricity is being supplied bundled with renting of immovable property and/or maintenance of premises, as the case may be, by real estate companies, malls, airport operators, it forms a part of composite supply and shall be taxed accordingly.
The principal supply is renting of immovable property and/or maintenance of premise, as the case may be, and the supply of electricity is an ancillary supply as the case may be. Even if electricity is billed separately, the supplies will constitute a composite supply and therefore, the rate of the principal supply i.e., GST rate on renting of immovable property and/or maintenance of premise, as the case may be, would be applicable.
The second part of the clarification regarding collection of electricity charges by real estate companies, malls, airport operators etc. is going against the interest of the taxpayer and as per section 168(1), circulars are not binding on the taxpayer. So, in the considered opinion of the writer, the taxpayer can apply the concept of pure-agent making proper agreement to the effect and following all the conditions prescribed in CGST Act and rules thereof.
4. District Mineral Foundations Trusts (DMFTs)
It has been clarified by Circular No. 206/18/2023-GST dated 31-10-2023 that DMFTs set up by the State Governments areGovernmental Authorities and thus eligible for the same exemptions from GST as available to any other Governmental Authority.
Reason is given that provide services related to drinking water supply, environment protection, healthcare facilities, education, welfare of women and children, supply of medical equipment etc. and these activities are similar to activities that are enlisted in the Eleventh Schedule and Twelfth Schedule of the Constitution. These schedules state activities entrusted to Panchayats and Municipalities under Art. 243G and 243W of the Constitution.
5. Services Supplied to CPWD
The CBIC has clarified through circular No. 206/18/2023-GST dated 31-10-2023 that supply of pure services and composite supplies by way of horticulture/horticulture works (where the value of goods constitutes not more than 25% of the total value of supply) made to CPWD are eligible for exemption from GST under Sr. No. 3 and 3A of Notification no 12/2017-CTR dated 28.06.2017.
Public parks in government residential colonies, government offices and other public areas are developed and maintained by CPWD and maintenance of community assets, urban forestry, protection of the environment and promotion of ecological aspects are functions entrusted to Panchayats and Municipalities under article 243G and 243W read with Sr. No. 29 of 11th Schedule and Sr. No. 8 of 12th Schedule of the constitution. Thus, services supplied to CPWD are entitled to exemption under Sr. No. 3 and 3A of NN 12/2017-CTR dated 28-6-2017.
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