28 June 2024

53rd GST Council Meeting – Highlights of Circulars issued by CBIC

The Central Board of Indirect Taxes and Customs has on 26 June 2024 issued 16 Circulars (Circular Nos. 207 to 222/2024-GST) to clarify various issues as also highlighted in the 53rd GST Council Meeting. A summary of all these Circulars is provided below.

  • Monetary limits set for Departmental appeals, etc., to GST Appellate Tribunal, High Courts, and Supreme Court – Exclusions and inclusions identified for computation of limit
  • Special procedure for manufacturers of tobacco and its products – Various issues clarified
  • Place of supply of goods (specially supplied through e-commerce platform) to unregistered persons, where billing address is different from the address of delivery of goods, is to be the place of delivery of goods.
  • Valuation of service imported from related person where domestic entity eligible for full credit – Value in invoice will be deemed to be open market value, if invoice issued. If no invoice is issued, NIL value is to be deemed to be the open market value.
  • Time-limit for Input Tax Credit in case of tax payment under RCM for supplies received from unregistered persons – Relevant FY is the year of issuance of invoice
  • Discounts through credit notes after supply – Verification of reversal of proportionate ITC – CA/CMA Certificate to be obtained from recipient about reversal of credit, if tax credit note exceeds INR 5 lakh in a Financial Year
  • No supply of service where foreign holding company issues ESOP/ESPP/RSU to the employees of domestic subsidiary company, and the domestic subsidiary company reimburses the cost of such securities/shares to the foreign holding company on cost-to-cost basis.
  • The amount of premium for taxable life insurance policies, which is not included in taxable value determined under Rule 32(4), does not pertain to a non-taxable/exempt supply and there is no requirement of reversal of ITC.
  • Insurance company is not liable to pay GST on salvage/wreckage value earmarked in the claim assessment of the motor vehicle damage if the insurance claim is settled after deducting the value of salvage from the claim amount.
  • Warranty/Extended warranty – Earlier Circular No. 195/07/2023-GST further clarified
  • ITC is available to insurance companies in respect of motor vehicle repair expenses incurred by them in case of reimbursement mode of claim settlement.
  • ITC is not available to the insurer where the invoice for the repair of the vehicle is not in name of the insurance company.
  • No supply of service if no consideration is charged from related person, or by an overseas affiliate from its Indian party, for extending loan or credit, other than by way of interest or discount.
  • ITC is not restricted in respect of ducts and manhole used in network of optical fiber cables (OFCs), under clause (c) or clause (d) of Section 17(5).
  • Custodial services provided by banks or financial institutions to FPIs are not services provided to ‘account holder’ and hence such services are not covered under Section 13(8)(a) of the IGST Act. Place of supply to be determined under Section 13(2) [location of recipient].
  • Tax liability under a Hybrid Annuity Model contract, for supply of service of construction and maintenance of road, would arise at the time of issuance of invoice, or receipt of payments, whichever is earlier, if the invoice is issued on or before the specified date or the date of completion of the event specified in the contract, as applicable.
  • Allocation of natural resources by Government (continuous supply of service) – In case deferred payment is made by the successful bidder in specified installments, GST would be payable as and when the payments are due or made, whichever is earlier.

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