Author: Karthik & Sunil

GST: Circular 164/20/2021 – Clarifications regarding applicable GST rates & exemptions on certain services

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The summary of the clarifications is given below:

Sl No.ServiceClarification related toGST Rate/Exemption
1Cloud kitchens/central kitchensCovered under restaurant service or notYes. GST Rate – 5% (without ITC)
2Supply of ice cream by ice cream parlorsCovered under restaurant service or notNo. GST at the rate of 18%
3Coaching services to students provided by coaching institutions and NGOs under the central sector scheme of „Scholarships for students with DisabilitiesExempted service or notExempted if where total expenditure is borne by the Government
4Satellite launch services provided by NSIL (New Space India Ltd.)Whether exemption available to ANTRIX Corporation Ltd. is available to NSILYes. Exemption available
5Overloading charges at toll plazaWhether overloading charges can be treated at par  as toll charges?Yes. Exempted
6Renting of vehicles to State Transport Undertakings and Local AuthoritiesThe expression “giving on hire” in Sl. No. 22 of the Notification No. 12/2017-CT (Rate) includes renting of vehicles.Yes. Exempted
7Services by way of grant of mineral exploration and mining rights – from 01-07-2017 to 31-12-2018Rate applicableGST Rate for the period 01-07-2017 to 31-12-2018 is also 18%.
8Admission to indoor amusement parks having rides etc.Amusement parks having Casinos, Race club etc/GST Rate 18% in case admission is only to amusement park.GST Rate 28% in case admission is casinos, race clubs etc. and amusement parks.
9Services supplied by contract manufacturers to brand owners for manufacture of alcoholic liquor for human consumptionWhether covered under job work services in relation to food and food products, which is taxable @ 5%.No. Taxable at 18%
GST: Circular 164/20/2021 – Clarifications regarding applicable GST rates & exemptions on certain services

GST: Circular 163/19/2021 GST – Clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 45th meeting

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The summary of clarifications issued is given below:

1. Fruits & Nuts – distinction between fresh and dried fruits and nuts and applicable GST rates: Exemption from GST to fresh fruits and nuts covers only such products which are not frozen or dried in any manner or otherwise processed. Supply of dried fruits and nuts, falling under heading 0801 and 0802 attract GST at the rate of 5%/12% as specified in the respective rate Schedules.

2. Tamarid Seeds – classification and applicable GST rates on tamarind seeds s between tariff heading 1207 and 1209: with effect from 1.10.2021, tamarind and other seeds falling under heading 1209, (i.e. including tamarind seeds), if not supplied as seed for sowing, would attract GST at the rate of 5%.

3. Clarification of definition of Copra: As per the Explanatory Notes to HS, the heading 0801 covers coconut fresh or dried but excludes Copra. Thus, exemption available to Coconut, fresh or dried, whether or not shelled or peeled, vide entry at S. No. 47 of notification No. 2/2017- Central Tax (Rate) dated 28.6.2017, is not available to Copra. Accordingly, Copra, classified under heading 1203, attracts GST rate of 5%.

4. Pure henna powder and leaves – Classification and applicable GST rates: Pure henna powder and henna leaves, having no additives, is classifiable under tariff item 1404 90 90 and shall attract GST rate of 5%.  GST rate on mehndi paste in cones falling under heading Clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 45th meeting.

5. Applicability of GST on scented sweet supari & flavored and coated illaichi: 

a)       Scented sweet supari falls under tariff item 2106 90 30 as “Betel nut product” known as “Supari” and attracts GST rate of 18%.

b) b) flavored and coated illaichi is a value added product and falls under sub-heading 2106 and It accordingly attracts Clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 45th meeting

6. Applicability of GST on Brewers’ Spent Grain (BSG), Dried Distillers’ Grains with Soluble [DDGS] and other such residues: Brewers’ spent grain (BSG), Dried distillers’ grains with soluble [DDGS] and other such residues are classifiable under heading 2303, attracting GST at the rate of 5%.

7. Scope of GST rate on all pharmaceutical goods falling under heading 3006: All goods falling under heading 3006 attract GST rate of 12% under entry 65 in the 12% rate schedule.

8. GST rates applicable on External batteries sold along with UPS Systems/ Inverter: tinctly identifiable items on one invoice. Therefore, it is clarified that in such supplies, UPS/ inverter would attract GST rate of 18% under heading 8504, while external batteries would attract the GST rate as applicable to it under heading 8507 (28% for all batteries except lithium-ion battery).

9. Applicability of GST rates on Solar PV Power Projects – Rates applicable from 01-07-2017 to 31-12-2018: GST on such specified Renewable Energy Projects can be paid in terms of the 70:30 ratio for goods and services, respectively, for the period of 1st July, 2017 to 31st December, 2018, in the same manner as has been prescribed for the period on or after 1st January, 2019, as per the explanation in the Notification No.24/2018 dated 31st December, 2018. However, it is specified that, no refunds will be granted if GST already paid is more than the amount determined using this mechanism.

10. Applicability of GST rates on Fibre Drums, whether corrugated or noncorrugated: GST rate of 18% on all goods classifiable under heading 4819 w.e.f. 01-10-2021. For the period prior to 1.10.2021, taking note of the fact that there was an ambiguity regarding the GST rates applicable on a Fibre Drums, because of its peculiar construction has decided that supplies of such Fibre Drums even if made at 12% GST (during the period from 1.7.2017 to 30.9.2021), would be treated as fully GST-paid.

GST: Circular 163/19/2021 GST – Clarification regarding GST rates & classification (goods) based on the recommendations of the GST Council in its 45th meeting

GST: Changes in GST Rate of goods w.e.f. 01-10-2021

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Notification No. 08/2021 Central Tax (Rate) dated September 30, 2021

S. No.DescriptionFromTo
GST rate changes
1.Retro fitment kits for vehicles used by the disabledAppl. rate5%
2.Tamarind seeds meant for any use other than sowingAppl. rate5%
3.Medicine Keytruda for treatment of cancer12%5%
4.Biodiesel supplied to OMCs for blending with Diesel12%5%
5.Iron ores and concentrates, including roasted iron pyrites.5%18%
6.Manganese ores and concentrates, including ferruginous manganese ores and concentrates with a manganese content of 20% or more, calculated on the dry weight.5%12%  
7.Copper ores and concentrates.5%18%                    
8.Nickel ores and concentrates.5%18%
9.Cobalt ores and concentrates5%18%
10.Aluminium ores and concentrates.5%18%
11.Lead ores and concentrates.5%18%
12.Zinc ores and concentrates.5%18%
13.Tin ores and concentrates.5%18%
14.Chromium ores and concentrates5%18%
15.Following renewable energy devices and parts for their manufacture:- (a)   Bio-gas plant; (b)   Solar power based devices; (c)   Solar power generator; (d)   Wind mills, Wind Operated Electricity Generator (WOEG); (e)   Waste to energy plants / devices; (f)   Solar lantern / solar lamp; (g)   Ocean waves/tidal waves energy devices/plants; (h)   Photo voltaic cells, whether or not assembled in modules or made up into panels.Explanation:- If the goods specified in this entry are supplied, by a supplier, along with supplies of other goods and services, one of which being a taxable service specified in the entry at S. No. 38 of the Table mentioned in the notification No. 11/2017-Central Tax (Rate), dated 28th June, 2017 [G.S.R. 690(E)], the value of supply of goods for the purposes of this entry shall be deemed as seventy percent of the gross consideration charged for all such supplies, and the remaining thirty percent of the gross consideration charged shall be deemed as value of the said taxable service.”;5%12%
16.Cartons, boxes, cases, bags and other packing containers, of paper, paperboard, cellulose wadding or webs of cellulose fibres; box files, letter trays, and similar articles, of paper or paperboard of a kind used in offces, shops or the like12%/18%18%
17.Waste, Parings and Scrap, of Plastics5%18%
18.Plans and drawings for architectural, engineering, industrial, commercial, topographical or similar purposes, being originals drawn by hand; hand- written texts; photographic reproductions on  sensitised  paper  and carbon copies of the foregoing12%18%
19.Unused postage, revenue or similar stamps of current or new issue in the country in which they have, or will have, a recognised face value; stamp- impressed paper; banknotes; cheque forms; stock, share or bond certificates and similar documents of title (other than Duty Credit Scrips).12%18%
20.Transfers (decalcomanias).12%18%
21.Printed or illustrated postcards; printed cards bearing personal greetings, messages or announcements, whether or not illustrated, with or without envelopes or trimmings.12%18%
22.Calendars of any kind, printed, including calendar blocks.12%18%
23.Other printed matter, including printed pictures and photographs; such as Trade advertising material, Commercial catalogues and the like, printed Posters, Commercial catalogues, Printed inlay cards, Pictures, designs and photographs, Plan and drawings for architectural engineering, industrial, commercial, topographical or similar purposes reproduced with the aid of computer or any other devices12%18%
24.Ball point pens; felt tipped and other porous tipped pens and markers; fountain pens; stylograph pens and other pens; duplicating stylos; pen holders, pencil holders and similar holders; parts (including caps and clips) of the foregoing articles, other than those of heading 9609.12%/18%18%
25.Railway parts, locomotives & other goods in Chapter 8612%18%
26.Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice18%28%
GST: Changes in GST Rate of goods w.e.f. 01-10-2021

GST: Additions to Exemptions in Services Category

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 [Notification No. 07/2021- CTR dated 30.09.2021]

· Services by an entity registered under section 12AB of the Income-tax Act, 1961 by way of charitable activities, Entry 12AA is already covered,12 AB is now added. 

· Services provided by and to FIFA and its subsidiaries directly or indirectly related to any of the events under FIFA U-17 Women’s World Cup 2020 to be hosted in India or wherever rescheduled.

· Services provided by and to Asian Football Confederation (AFC) and its subsidiaries directly or indirectly related to any of the events under AFC Women’s Asia Cup 2022 to be hosted in India.

· Services by an old age home run by an entity registered under section 12AB of the Income-tax Act, 1961 to its residents (aged 60 years or more) against consideration up to Rs. 25,000/- per month per member.

· Services by way of transportation of goods by an aircraft/vessel from customs station of clearance in India to a place outside India – Exemption extended till 30th Sept 2022

· Services by way of granting National Permit to a goods carriage to operate through-out India / contiguous States.

· Services provided to the CG, SG, UT administration under any training programme for which 75% or more expenditure is borne by the CG, SG, UT administration.

· Services by way of right to admission to the events organised under AFC Women’s Asia Cup 2022

GST: Additions to Exemptions in Services Category

GST: Changes in GST Rates for Services with effect from 01st October 2021

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[Notification No. 06/2021- CTR dated 30.09.2021]

ParticularsHeadingOld RateNew Rate
Temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property (IP) right in respect of goods other than Information Technology software.997312% 18%
Services by way of job work in relation to manufacture of alcoholic liquor for human consumption998812%18%
Services by way of printing of all goods falling under Chapter 48 or 49 [including newspapers, books (including Braille books), journals and periodicals], which attract CGST @ 6 per cent. or 2.5per cent. or Nil, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer998912%18%
GST: Changes in GST Rates for Services with effect from 01st October 2021

GST: Circular 162/2021 – Clarification in respect of refund of tax specified in section 77(1) of the CGST Act and section 19(1) of the IGST Act

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CBIC vide notification 35/2021(CGST) amended Rule 89 of CGST Rules, 2017, and introduced time limit for claiming refund of tax paid wrongly as Intra state supply, which was lsubsequently held as interstate supply. The time limit was two years from the date of payment of tax for inter-state supply. This circular brings the following clarifications related to refund u/s.77(1):
1. Interpretation of the term “subsequently held”: The term “subsequently held” in section 77 of CGST Act, 2017 or under section 19 of IGST Act, 2017 covers both the cases where the inter-State or intra-State supply made by a taxpayer, is either subsequently found by taxpayer himself as intra-State or inter-State respectively or where the inter-State or intra-State supply made by a taxpayer is subsequently found/ held as intra-State or inter-State respectively by the tax officer in any proceeding.
 2. The relevant date for claiming refund under section 77 of the CGST Act/ Section 19 of the IGST Act, 2017: The refund under section 77 of CGST Act/ Section 19 of IGST Act, 2017 can be claimed before the expiry of two years from the date of payment of tax under the correct head, i.e. integrated tax paid in respect of subsequently held inter-State supply, or central and state tax in respect of subsequently held intra-State supply, as the case may be. However, in cases, where the taxpayer has made the payment in the correct head before the date of issuance of notification No.35/2021-Central Tax dated 24.09.2021, the refund application under section 77 of the CGST Act/ section 19 of the IGST Act can be filed before the expiry of two years from the date of issuance of the said notification. i.e. from 24.09.2021.
The entire text of the circular is given below: 

Circular No. 162/18/2021-GST

F. No. CBIC-20001/8/2021-GST

Government of India Ministry of Finance Department of Revenue

Central Board of Indirect Taxes and Customs GST Policy Wing

****

New Delhi, dated the 25th September, 2021

To,

The    Principal     Chief    Commissioners/Chief     Commissioners/Principal     Commissioners/ Commissioners of Central Tax (All)

The Principal Directors General/ Directors General (All) Madam/Sir,

Subject: Clarification in respect of refund of tax specified in section 77(1) of the CGST Act and section 19(1) of the IGST Act -Reg

Representations have been received seeking clarification on the issues in respect of refund of tax wrongfully paid as specified in section 77(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”) and section 19(1) of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as “IGST Act”). In order to clarify these issues and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the CGST Act, hereby clarifies the issues detailed hereunder:

2.1       Section 77 of the CGST Act, 2017 reads as follows:

“77. Tax wrongfully collected and paid to Central Government or State Government. — (1) A registered person who has paid the Central tax and State tax or, as the case may be, the Central tax and the Union territory tax on a transaction considered by him to be an intra-State supply, but which is subsequently held to be an inter-State supply, shall be refunded the amount of taxes so paid in such manner and subject to such conditions as may be prescribed.

(2) A registered person who has paid integrated tax on a transaction considered by him to be an inter-State supply, but which is subsequently held to be an intra-State supply, shall not be required to pay any interest on the amount of central tax and State tax or, as the case may be, the Central tax and the Union territory tax payable.”

Section 19 of the IGST Act, 2017 reads as follows:

“19. Tax wrongfully collected and paid to Central Government or State Government——(1) A registered person who has paid integrated tax on a supply considered by him to be an inter-State supply, but which is subsequently held to be an intra-State supply, shall be granted refund of the amount of integrated tax so paid in such manner and subject to such conditions as may be prescribed.

(2) A registered person who has paid central tax and State tax or Union territory tax, as the case may be, on a transaction considered by him to be an intra-State supply, but which is subsequently held to be an inter-State supply, shall not be required to pay any interest on the amount of integrated tax payable.”

3.  Interpretation of the term “subsequently held”

3.1              Doubts have been raised regarding the interpretation of the term “subsequently held” in the aforementioned sections, and whether refund claim under the said sections is available only if supply made by a taxpayer as inter-State or intra-State, is subsequently held by tax officers as intra-State and inter-State respectively, either on scrutiny/ assessment/ audit/ investigation, or as a result of any adjudication, appellate or any other proceeding or whether the refund under the said sections is also available when the inter-State or intra-State supply made by a taxpayer, is subsequently found by taxpayer himself as intra-State and inter-State respectively.

3.2              In this regard, it is clarified that the term “subsequently held” in section 77 of CGST Act, 2017 or under section 19 of IGST Act, 2017 covers both the cases where the inter-State or intra-State supply made by a taxpayer, is either subsequently found by taxpayer himself as intra-State or inter-State respectively or where the inter-State or intra-State supply made by a taxpayer is subsequently found/ held as intra-State or inter-State respectively by the tax officer in any proceeding. Accordingly, refund claim under the said sections can be claimed by the taxpayer in both the above mentioned situations, provided the taxpayer pays the required amount of tax in the correct head.

4.  The relevant date for claiming refund under section 77 of the CGST Act/ Section 19 of the IGST Act, 2017

4.1              Section 77 of the CGST Act and Section 19 of the IGST Act, 2017 provide that in case a supply earlier considered by a taxpayer as intra-State or inter-State, is subsequently held as inter-State or intra-State respectively, the amount of central and state tax paid or integrated tax paid, as the case may be, on such supply shall be refunded in such manner and subject to such conditions as may be prescribed. In order to prescribe the manner and conditions for refund under section 77 of the CGST Act and section 19 of the IGST Act, sub-rule (1A) has been inserted after sub-rule (1) of rule 89 of the Central Goods and Services Tax Rules, 2017

(hereinafter referred to as “CGST Rules”) vide notification No. 35/2021-Central Tax dated 24.09.2021. The said sub-rule (1A) of rule 89 of CGST Rules, 2017 reads as follows:

“(1A) Any person, claiming refund under section 77 of the Act of any tax paid by him, in respect of a transaction considered by him to be an intra-State supply, which is subsequently held to be an inter-State supply, may, before the expiry of a period of two years from the date of payment of the tax on the inter-State supply, file an application electronically in FORM GST RFD-01 through the common portal, either directly or through a Facilitation Centre notified by the Commissioner:

Provided that the said application may, as regard to any payment of tax on inter-State supply before coming into force of this sub-rule, be filed before the expiry of a period of two years from the date on which this sub-rule comes into force.”

4.2              The aforementioned amendment in the rule 89 of CGST Rules, 2017 clarifies that the refund under section 77 of CGST Act/ Section 19 of IGST Act, 2017 can be claimed before the expiry of two years from the date of payment of tax under the correct head, i.e. integrated tax paid in respect of subsequently held inter-State supply, or central and state tax in respect of subsequently held intra-State supply, as the case may be. However, in cases, where the taxpayer has made the payment in the correct head before the date of issuance of notification No.35/2021-Central Tax dated 24.09.2021, the refund application under section 77 of the CGST Act/ section 19 of the IGST Act can be filed before the expiry of two years from the date of issuance of the said notification. i.e. from 24.09.2021.

4.3              Application of sub-rule (1A) of rule 89 read with section 77 of the CGST Act / section 19 of the IGST Act is explained through following illustrations.

A taxpayer “A” has issued the invoice dated 10.03.2018 charging CGST and SGST on a transaction and accordingly paid the applicable tax (CGST and SGST) in the return for March, 2018 tax period. The following scenarios are explained hereunder:

Sl.no.ScenarioLast date for filing the refund claim
1Having realized on his own that the said transaction is an inter-State supply, “A” paid IGST in respect of the said transaction on 10.05.2021.Since “A” has paid the tax in the correct head before issuance of notification No. 35/2021-Central Tax, dated 24.09.2021, the last date for filing refund application in FORM GST RFD-01 would be 23.09.23 (two yearsfrom date of notification)
2Having realized on his own that the saidtransaction is an inter-State supply, “A” paid IGST in respect of the said transaction on 10.11.2021 i.e. after issuance of notification No. 35/2021-Central Tax dated 24.09.2021Since “A” has paid the correct tax on10.11.2021, in terms of rule 89 (1A) of the CGST Rules, the last date for filing refund application in FORM GST RFD-01 would be 09.11.2023 (two years from the date of payment of tax under the correct head, i.e. integratedtax)
3Proper officer or adjudication authority or appellate authority of “A” has held the transaction as an inter-State supply and accordingly, “A” has paid the IGST in respect of the said transaction on 10.05.2019Since “A” has paid the tax in the correct head before issuance of notification No. 35/2021-Central Tax, dated 24.09.2021, the last date for filing refund application in FORM GST RFD-01 would be 23.09.23 (two yearsfrom date of notification)
4Proper officer or adjudication authority or appellate authority of “A” has held the transaction as an inter-State supply and accordingly, “A” has paid the IGST in respect of the said transaction on 10.11.2022 i.e. after issuance of notification No. 35/2021- Central Tax dated 24.09.2021Since “A” has paid the correct tax on 10.11.2022, in terms of rule 89 (1A) of the CGST Rules, the last date for filing refund application in FORM GST RFD-01 would be 09.11.2024 (two years from the date of payment of tax under the correct head, i.e. integratedtax)

The examples above are only indicative one and not an exhaustive list. Rule 89 (1A) of the CGST Rules would be applicable for section 19 of the IGST Act also, where the taxpayer has initially paid IGST on a specific transaction which later on is held as intra-State supply and the taxpayer accordingly pays CGST and SGST on the said transaction. It is also clarified that any refund applications filed, whether pending or disposed off, before issuance of notification No.35/2021-Central Tax, dated 24.09.2021, would also be dealt in accordance with the provisions of rule 89 (1A) of the CGST Rules, 2017.

4.4              Refund under section 77 of the CGST Act / section 19 of the IGST Act would not be available where the taxpayer has made tax adjustment through issuance of credit note under section 34 of the CGST Act in respect of the said transaction.

5.                  It is requested that suitable trade notices may be issued to publicize the contents of this circular.

6.                  Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board. Hindi version would follow.

(Sanjay Mangal)

 Principal Commissioner (GST)

GST: Circular 162/2021 – Clarification in respect of refund of tax specified in section 77(1) of the CGST Act and section 19(1) of the IGST Act

GST: Notification 36/2021 dated 24-09-2021 – Aadhar Authentication

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Sl No.Notification No.Change related toChangesEffective Date
13/2021Aadhar AuthentiationAadhar Authentication is not applicable to Not an Indian Citizen,Govt. Dept. or Establihsments,Local Authority, Statutory Body, PSU, UIN Registrations24-09-2021
GST: Notification 36/2021 dated 24-09-2021 – Aadhar Authentication

GST: Notification 35/2021 dated 24.09.2021 – Changes in CGST Rules

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Sl No.Rule No.Change related toChangesEffective Date
110AFurnishing of bank account after registration within 45 days of registrationi) The bank account should be in the name of Registered person and obtained by giving PAN of the Registered person.
Ii) In case of Proprietor, PAN should be linked with Aadhar		24-09-2021
210BNew rule inserted related to Aadhar Authentication of existing registered personsAadhar authentication needs to be done by authorised signatories of (Proprietor/Partner/Kartha/Director/Trustee etc.)existing registered person in order to be eligible for the following:
1. Filing Revocation of Cancellation of Registration in form GST-REG 21;
2. Filing RFD-1 for claiming refund; and
3. Claiming IGST refund of tax paid on export under rule 96.
In case aadhar in not alloted, copy of Aadhar Enrolment ID slip and anyone of Bank Statement/Voters’ ID/Passport/Driving Licence to be submitted and aadhar authentication needs to be completed in 30 days of allotment of aadhar.		24-09-2021
323Revocation of Cancellation – Reference to Rule 10BFor submitting revocation of cancellation, Rule 10B to be complied by the assessee before filing application of revocation.24-09-2021
445ITC on goods send to job worker – To give effect of the change in periodicity of filing Form GST ITC-04 for assessees having turnover less than Rs.5 Crore and above Rs.5 CroreFiling of GST ITC-04 For assessees having aggregate turnover
1. Above Rs.5 Crores – File return Half-yearly
2. Less than Rs.5 Crore – File return annually		24-09-2021
559GSTR-1: Default in filing GSTR-3B – Not allowed to file GSTR-1 if defaulted in preceding 2 months.The GSTR-3B default is reduced to one month01-01-2022
689 (1)Application of refund of Tax etc – Reference to Rule 10BFor filing GST RFD-1, Rule 10B needs to be complied24-09-2021
789New Rule inserted related to time limit for claiming refund of tax paid as intrastate tax subsequently assessed as Interstate TaxThe refund should be claimed within 2 years from the date of payment of interstate tax by filing Form RFD-1. For cases pending before this rule, 2 years from the date the rule become effective.24-09-2021
896Refund of IGST on goods exported our of IndiaReference to Rule 10B24-09-2021
996CNew Rule – Bank Account for Credit of RefundBank account should be in the name of application and obtained on his PAN. In case of proprietorship, PAN and Aadhar needs to be linked.24-09-2021
GST: Notification 35/2021 dated 24.09.2021 – Changes in CGST Rules

GST: Export of Service taxability

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 CBIC had issued  a clarificatory  Circular (Circular No. 161/17/2021-GST dated 20-09-2021) on taxability of export of services by a subsidiary/ sister concern/ group concern. The question clarified by the department was regard to whether the subsidiary/ sister concern/ group concern will come uder the definition of merely establishments of a distinct person in accordance with Explanation 1 in section 8;

In the Circular, it’s clarified that, , supply of services by a subsidiary/ sister concern/ group concern, etc. of a foreign company, which is incorporated in India under the Companies Act, 2013, to the establishments of the said foreign company located outside India (incorporated outside India), would not be barred by the condition (v) of the sub-section (6) of the section 2(merely establishment of a distinct person)of the IGST Act 2017 for being considered              as export of services.

The entire text of the Circular is given below:

F. No. CBIC-20001/8/2021–GST

Government of India Ministry of Finance Department of Revenue

Central Board of Indirect Taxes and Customs GST Policy Wing

******

New Delhi, dated the 20th September, 2021

To

The Pr. Chief Commissioners / Chief Commissioners / Principal Commissioners / Commissioners of Central Tax (All)

The Principal Directors General / Directors General (All) Madam/ Sir,

Subject: Clarification relating to export of services-condition (v) of section 2(6) of the IGST Act 2017–reg.

Various representations have been received citing ambiguity caused in interpretation of the Explanation 1 under section 8 of the IGST Act 2017 in relation to condition (v) of export of services as mentioned in sub-section (6) of the section 2 of the IGST Act 2017. Doubts have been raised whether the supply of service by a subsidiary/ sister concern/ group concern, etc. of a foreign company in India, which is incorporated under the laws in India, to the foreign company incorporated under laws of a country outside India, will hit by condition (v) of sub- section (6) of section 2 of IGST Act.

2. The matter has been examined. In view of the difficulties being faced by the trade and industry and to ensure uniformity in the implementation of the provisions of the law across field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”), hereby clarifies the issue in succeeding paragraphs.

Relevant legal provisions:

3.1              The export of services has been defined in sub-section (6) of the section 2 of the IGST Act 2017 as under:

(6)  “export of services” means the supply of any service when,––

(i)  the supplier of service is located in India;

(ii)  the recipient of service is located outside India;

(iii)  the place of supply of service is outside India;

(iv)   the payment for such service has been received by the supplier of service in convertible foreign exchange; and

(v)     the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8;

3.2              Explanation 1 of the Section 8 of the IGST Act provides for the conditions wherein establishments of a person would be treated as establishments of distinct persons, which is reproduced as under:

Explanation 1.––For the purposes of this Act, where a person has,––

(i)             an establishment in India and any other establishment outside India;

(ii)               an establishment in a State or Union territory and any other establishment outside that State or Union territory; or

(iii)            an establishment in a State or Union territory and any other establishment being a business vertical registered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons.

As per the above Explanation, an establishment of a person in India and another establishment of the said person outside India are considered as establishments of distinct persons.

3.3              Reference is also invited to the Explanation 2 of Section 8 of IGST Act, which is reproduced below:

“Explanation 2.––A person carrying on a business through a branch or an agency or a representational office in any territory shall be treated as having an establishment in that territory.”

3.4              Reference is also invited to the definition of “person” as provided under CGST Act 2017, made applicable to IGST Act vide section 2(24) of IGST Act 2017. “Person” has been defined under sub-section (84) of the section 2 of the CGST Act 2017, as under:

(84)  “person” includes—

(a)  an individual;

(b)  a Hindu Undivided Family;

(c)  a company;

(d)  a firm;

(e)  a Limited Liability Partnership;

(f)   an association of persons or a body of individuals, whether incorporated or not, in India or outside India;

(g)   any corporation established by or under any Central Act, State Act or Provincial Act or a Government company as defined in clause (45) of section 2 of the Companies Act, 2013;

(h)    any body corporate incorporated by or under the laws of a country outside India;

(i)   a co-operative society registered under any law relating to co-operative societies;

(j)   a local authority;

(k)  Central Government or a State Government;

(l)   society as defined under the Societies Registration Act, 1860;

(m)   trust; and

(n)  every artificial juridical person, not falling within any of the above;

3.5.      The definitions of company and foreign company have been provided under section 2 of Companies Act 2013, as under:

(20) “company” means a company incorporated under this Act or under any previous company law;

(42)  “foreign company” means any company or body corporate incorporated outside India which—

(a)  has a place of business in India whether by itself or through an agent, physically or through electronic mode; and

(b)  conducts any business activity in India in any other manner.

Analysis of the issue:

4.1              Clause (v) of sub-section (6) of section 2 of IGST Act, which defines “export of services”, places a condition that the services provided by one establishment of a person to another establishment of the same person, considered as establishments of distinct persons as per Explanation 1 of section 8 of IGST Act, cannot be treated as export. In other words, any supply of services by an establishment of a foreign company in India to any other establishment of the said foreign company outside India will not be covered under definition of export of services.

4.2              Further, perusal of the Explanation 2 to section 8 of the IGST Act suggests that if a foreign company is conducting business in India through a branch or an agency or a representational office, then the said branch or agency or representational office of the foreign company, located in India, shall be treated as establishment of the said foreign company in India. Similarly, if any company incorporated in India, is operating through a branch or an agency or a representational office in any country outside India, then that branch or agency or representational office shall be treated as the establishment of the said company in the said country.

4.3. In view of the above, it can be stated that supply of services made by a branch or an agency or representational office of a foreign company, not incorporated in India, to any establishment of the said foreign company outside India, shall be treated as supply between establishments of distinct persons and shall not be considered as “export of services” in view of condition (v) of sub-section (6) of section 2 of IGST Act. Similarly, any supply of service by a company incorporated in India to its branch or agency or representational office, located in any other country and not incorporated under the laws of the said country, shall also be considered as supply between establishments of distinct persons and cannot be treated as export of services.

4.4 From the perusal of the definition of “person” under sub-section (84) of section 2 of the CGST Act, 2017 and the definitions of “company” and “foreign company” under Section 2 of the Companies Act, 2013, it is observed that a company incorporated in India and a foreign company incorporated outside India, are separate “person” under the provisions of CGST Act and accordingly, are separate legal entities. Thus, a subsidiary/ sister concern/ group concern of any foreign company which is incorporated in India, then the said company incorporated in India will be considered as a separate “person” under the provisions of CGST Act and accordingly, would be considered as a separate legal entity than the foreign company.

Clarification:

5.1              In view of the above, it is clarified that a company incorporated in India and a body corporate incorporated by or under the laws of a country outside India, which is also referred to as foreign company under Companies Act, are separate persons under CGST Act, and thus are separate legal entities. Accordingly, these two separate persons would not be considered as “merely establishments of a distinct person in accordance with Explanation 1 in section 8”.

5.2              Therefore, supply of services by a subsidiary/ sister concern/ group concern, etc. of a foreign company, which is incorporated in India under the Companies Act, 2013 (and thus qualifies as a ‘company’ in India as per Companies Act), to the establishments of the said foreign company located outside India (incorporated outside India), would not be barred by the condition (v) of the sub-section (6) of the section 2 of the IGST Act 2017 for being considered as export of services, as it would not be treated as supply between merely establishments of distinct persons under Explanation 1 of section 8 of IGST Act 2017 . Similarly, the supply from a company incorporated in India to its related establishments outside India, which are incorporated under the laws outside India, would not be treated as supply to merely establishments of distinct person under Explanation 1 of section 8 of IGST Act 2017. Such supplies, therefore, would qualify as ‘export of services’, subject to fulfilment of other conditions as provided under sub-section (6) of section 2 of IGST Act.

6.                    It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

7.                  Difficulty, if any, in the implementation of this Circular may be brought to the notice of the Board. Hindi version will follow.

(Sanjay Mangal)

Principal Commissioner

GST: Export of Service taxability

Annual General Meeting – Extension of Time Limit

Karthik & Sunil, , , Leave a comment

Government of India
Ministry of Corporate Affairs
Office of the Director General of Corporate Affairs
CL-II-03/252/2021-0/o DGCoA-MCA

Kota House Annexe,
1, Shahjahan Road,
New Delhi-110011.

Dated 23.09.2021

OFFICE MEMORANDUM

Subject: Extension of time for holding of Annual General Meeting (AGM) for the Financial year ended on 31.03.2021

1. The Central Government has received representations seeking extension of time for holding Annual General Meeting (AGM) for the financial year 2020-21 ending on 31st March 2021 citing many difficulties faced due to second wave of Covid-19 and consequent lockdowns etc.

2. Accordingly, it has been decided to advise the Registrar of Companies (RoCs) to accord approval for extension of time for a period of two Months beyond the due date by which companies are required to conduct their AGMs for the financial year 2020-21 ended on 31st March 2021.

3. Kindly find enclosed a copy of the standard template for the order to be issued by RoCs under third proviso to sub-section (1) of section 96 of the Companies Act, 2013 ( the Act) for granting extension of time for conducting of AGM for the Financial Year 2020-21 ended on 31.03.2021 .

4. Please take this action with utmost urgency and issue order before the close of the office today and forward the copy of the order to this office before for consolidation and uploading it on the MCA21 website. Also display this order on the Notice Board of your respective offices.

5. This issues with approval of the Competent Authority.

End: As above

(Gaurav)
Deputy Director

Annual General Meeting – Extension of Time Limit