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GST New & Updates – Circulars on GST Amendments

  • Nov 15, 2019 | Keval Shah

After making several amendments in GST laws including those on input tax credit, rate cuts etc, the Government has issued new circulars in line with the changes.  Here's a quick update. 

  • Circular No. 113/32/2019-GST

Clarification regarding GST rates & classification (goods)–reg.

The said Circular clarifies on classification/clarifications of various products based on representations made. The classification of products as clarified is as below:

Product Classification/clarification provided
Leguminous vegetables when subject to mild heat treatment
Classifiable under 0713 in case only heat treatment done.
In case it is mixed with other ingredients then classifiable under 2106 90
Almond Milk Almond milk neither constitutes any fruit pulp or fruit juice and not classifiable under 2202 99 20 but under residuary entry 2202 99 90
Mechanical Sprayer The GST Council in its 25th meeting recommended 12% GST on mechanical sprayers and accordingly rate is changed to 12%
Imported stores by the Indian Navy Such goods are exempted from payment of Customs duty, but no exemption is provided under GST law.
Goods imported under lease Customs duty is exempted under Notification 50/2017-Customs dated 30.06.2017 on account of avoiding of double taxation
Parts for the manufacture solar water heater and system Parts including Solar Evacuated Tube falling under chapter 84, 85 and 94 for the manufacture of solar water heater and system will attract 5% GST
Parts and accessories suitable for use solely or principally with a medical device Parts and accessories of the instruments used mainly and principally for the medical instrument of chapter 90 shall be classified with the machine only
  • Circular No. 114/33/2019-GST

Clarification on scope of support services to exploration, mining or drilling of petroleum crude or natural gas or both

Clarification with respect to the scope of the entry “services of exploration, mining or drilling of petroleum crude or natural gas or both” is provided as under:

Most of the activities associated with exploration, mining or drilling of petroleum crude or natural gas fall under heading 9986. A few services particularly technical and consulting services relating to exploration also fall under heading 9983. Therefore, following entry has been inserted under heading 9983 with effect from 1st October 2019 vide Notification No. 20/2019- Central Tax (Rate) dated 30.09.2019

  • Circular No. 115/34/2019-GST

Clarification on issue of GST on Airport levies

It is clarified that PSF (Passenger Service Fee) and UDF (User Development Fees) as charged by Airport Authorities are liable for payment of GST.

Since these charges are collected by Airlines, they may be eligible to take the benefit of Pure Agent Reimbursement subject to fulfilling of conditions laid down in Rule 33 of CGST Rules, 2017. In case it is claimed as Pure Agent Reimbursement, ITC of GST charged on PSF and UDF shall not be eligible to the Airline.

  • Circular No. 116/35/2019-GST

Levy of GST on the service of display of name or placing of name plates of the donor in the premises of charitable organizations receiving donation or gifts from individual donors

It is clarified that in cases where all the three conditions are satisfied namely the gift or donation is made to a charitable organization, the payment has the character of gift or donation and the purpose is philanthropic (i.e. it leads to no commercial gain) and not advertisement, then no GST is applicable.

In case the donation/gift is given under an obligation to promote/advertise the business of assessee, then it will be liable for GST.

  • Circular No. 117/36/2019-GST

Clarification on applicability of GST exemption to the DG Shipping approved maritime courses conducted by Maritime Training Institutes of India

It has been clarified that Maritime Training Institutes and their training courses are approved by the Director General of Shipping which are duly recognized under the provisions of the Merchant Shipping Act, 1958 read with the Merchant Shipping (standards of training, certification and watch-keeping for Seafarers) Rules, 2014.

Therefore, the Maritime Institutes are educational institutions under GST Law and the courses conducted by them are exempt from levy of GST.

  • Circular No. 118/37/2019-GST

Clarification regarding determination of place of supply in case of software/design services related to Electronics Semi-conductor and Design Manufacturing (ESDM) industry

Representations were being made to seek a clarification with respect to certain transactions, where software being developed in India for an overseas client. Also, the hardware is brought to India and the prototype is tested on such hardware. Whether such transactions would qualify as performance-based services and accordingly be liable for payment of GST in India.

It is clarified that testing the software is just an ancillary activity and cannot be vivisected from the main supply, which is development of software.

The place of supply in such transaction shall be location of recipient i.e. outside India and accordingly may constitute export of service but to satisfaction of other conditions.

  • Circular No. 119/38/2019-GST

Clarification regarding taxability of supply of securities under Securities Lending Scheme, 1997

The activity of lending of securities is not a transaction in securities as it does not involve disposal of securities. The lender temporarily lends the securities held by him to a borrower and charges lending fee for the same from the borrower. The said lending fee is liable for payment of GST on forward charge for period from 01.07.2017 to 30.09.2019.

W.e.f. 01.10.2019, the provisions of RCM are made applicable to such lending fees and accordingly the borrower paying such lending fees shall be liable for payment of GST.

  • Circular No. 121/40/2019-GST

GST on license fee charged by the States for grant of Liquor licenses to vendors

GST Council in its 26th meeting held on 10.03.2018, recommended that GST should not be leviable on license fee and application fee, by whatever name it is called, payable for alcoholic liquor for human consumption.

To give effect to such recommendation, adequate notification has been issued to exempt payment of GST on such fees. Even more, Budget 2019, also provided for retrospective amendment for exempting payment of service tax on such amounts.

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Avalara helps businesses of all sizes get GST return filing, e-way bill generation and e-invoicing right with cloud-based GST compliance solutions in India. Goods and Services Tax (GST) rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Keval Shah
Avalara Author Keval Shah
Keval Shah is the Founder Partner of ConsultingEdge and has a handy experience of more than ten years into indirect taxes. Keval is presently the Convener of Indirect Tax Committee of Chamber of Tax Consultants. He has authored a book on GST Impact on Construction Industry published by “GST Practitioners Association of Maharashtra”. He regularly speaks at forums like ICAI, Chamber of Tax Consultants, BCAS and is a visiting faculty at Indo-German Training Centre.