Sunday, 30 June 2024

Synopsis of GST Circulars


Circular No. 207/1/2024-GST I Date: 26-06-2024

Subject: Reduction of Government Litigation - Fixing Monetary Limits for Filing Appeals

Key Points:

                     Objective: To minimize government litigation by setting monetary limits for appeals in revenue matters, optimizing judicial resources

                     Thresholds: Specifies monetary limits below which appeals should not be filed: Rs. 20 lakhs for GSTAT, Rs. 1 crore for High Court, and Rs. 2 crores for Supreme Court.

                     Exclusions: Cases involving constitutional issues, significant precedents, or adverse comments against the government are excluded from these limits.

                     Implementation: Encourages  prudent litigation practices  and  ensures faster resolution of cases, providing certainty to taxpayers regarding tax assessments.

 

Circular No. 208/2/2024-GST I Date: 26-06-2024

Subject: Clarifications on Special Procedure for Manufacturers of Specified Commodities Key Points:

                     Notification Reference: Pertains to Notification No. 04/2024-Central Tax dated 05.01.2024, which revised the special procedure for specified commodities.

                     Old Machines: Allows manufacturers to declare the year of purchase if the make and model numbers of old or second-hand machines are unavailable.

                     Electricity Consumption: Requires a Chartered Engineer's certification for electricity consumption ratings when specifications are not available.

                    Manual Operations: Clarifies that the special procedure does not apply to manual packing operations, including post-harvest packing of tobacco leaves.

 

Circular No. 209/3/2024-GST I Date: 26-06-2024

Subject: Provisions of Clause (ca) of Section l 0( l)  of IGST Act                                                                                                        Key Points:

                       Amendment: Introduces clause (ca) to Section l 0( l) of the IGST Act, effective from Ol . l 0.2023, addressing the place of supply for goods to unregistered persons.

                       Place of Supply: Specifies that the place of supply will be the delivery address if it differs from the billing address in the invoice, ensuring clarity in e-commerce transactions.

                       E-commerce Context: Clarifies that for orders placed online, the delivery address determines the place of supply, simplifying tax compliance for suppliers.

 

 

Circular No. 210/4/2024-GST I Date: 26-06-2024

Subject: Valuation of Supply of Import of Services by Related Persons

Key Points:

                       Import of Services: Addresses the  valuation for importing services between related persons, particularly where no consideration is involved.

                      No Consideration: Confirms that no GST is applicable when services are provided without consideration, provided the recipient can claim full ITC.

                       Self-Invoice: Requires registered persons in India to issue a self-invoice for services received from related foreign entities and pay tax on a reverse charge basis, ensuring proper tax compliance.

 

 

Circular No. 211/5/2024-GST I Date: 26-06-2024

Subject: Clarifications on GST Treatment for General Insurance Companies on Salvage Key Points:

                       Salvage Ownership: Differentiates GST liability based on the ownership of salvage after insurance claim settlement.

                       Deductibles: Explains that if the salvage remains with the insured, the insurance company has no GST liability on the salvage value deducted from the claim. 

                        Full lDV Settlements: Clarifies that when the insurance company pays the full lDV without deducting salvage value, the salvage becomes the company's property and GST is applicable on its sale.

 

Circular No. 212/6/2024-GST I Date: 26-06-2024

Subject: Clarification on GST Liability and ITC Availability in Cases Involving Warranty/Extended Warranty

Key Points:

                        Warranty Replacements: Provides detailed guidance on GST treatment for parts replaced under warranty, ensuring clarity for manufacturers and service providers.

                       Extended Warranties: Addresses the GST implications for extended warranties and outlines the procedures for claiming ITC reversals, promoting uniformity in tax treatment.

Circular No. 213/7/2024-GST I Date: 26-06-2024

Subject: Taxability of ESOP/ESPP/RSU Provided by a Company to Employees through Overseas Holding Company

Key Points:

                       Reimbursement: Clarifies that the reimbursement of costs for shares issued by foreign holding companies to employees of Indian subsidiaries is not subject to GST.

                       Additional Charges: Specifies that GST is applicable if the foreign holding company charges any additional fee, markup, or commission for issuing shares, ensuring proper tax compliance.

 

Circular No. 214/8/2024-GST I Date: 26-06-2024

Subject: Requirement of Reversal of ITC in Respect of Premium for Life Insurance Policies Key Points:

                       Investment Component: Clarifies that the portion of life insurance premium allocated for investment or savings is not  subject to ITC reversal, providing relief to insurers.

                       Taxable Value: Ensures that only the portion of the premium included in the taxable value requires ITC reversal, aligning with the provisions of Rule 32(4) of CGST Rules.

 

Circular No. 215/9/2024-GST I  Date: 26-06-2024

Subject: Clarification on GST Applicability on Commission and Fees Charged by Banks

Key Points:

                       Banking Services: Provides comprehensive guidance on the applicability of GST for various commissions and fees charged by banks, ensuring consistent tax treatment.

                       Uniform Implementation: Aims to standardize the application of GST provisions across different field formations, reducing ambiguities for financial institutions.

 

Circular No. 216/10/2024-GST I Date: 26-06-2024

Subject: Clarification on  Warranty/Extended  Warranty 

Key Points:

                       GST on Warranty: Elaborates on the GST implications for parts replaced under warranty, including scenariosinvolving distributors and manufacturers.

                       ITC Reversal: Clarifies the procedures for ITC reversal related to warranty replacements and extended warranties, ensuring compliance with tax regulations.

 

Circular No. 217/11/2024-GST I Date: 26-06-2024

Subject: ITC by Insurance Companies on Repair Expenses in Reimbursement Mode

Key Points:

                       ITC Claims: Clarifies the conditions under which insurance companies can claim ITC on repair expenses, distinguishing between cashless and reimbursement modes.

                       Cashless and Reimbursement: Provides guidelines for ITC eligibility based on the mode of repair expense reimbursement, ensuring proper tax treatment.

 

Circular No. 218/12/2024-GST I  Date: 26-06-2024

Subject: Taxability of Loan Transactions Between Related Persons

Key Points:

                       Loan Transactions: Clarifies that loans provided by an overseas affiliate to its Indian affiliate are not considered a supply of service if the consideration is only interest or discount

                        No GST: Confirms that such transactions are not subject to GST, providing clarity on the tax treatment of intra-group loans.

 

 

Circular No. 219/13/2024-GST I Date: 26-06-2024

Subject: ITC on Ducts and Manholes Used in OFCs Network

Key Points:

                        Plant and Machinery: Confirms that ITC is available for ducts and manholes used in optical fibre cable networks, classifying them as plant and machinery, which is eligible for credit.

 

 

Circular No. 220/14/2024-GST I Date: 26-06-2024

Subject: Time of Supply for Spectrum Allocation Services

Key Points:

                        Deferred Payments: Clarifies the time of supply for spectrum allocation services where payments are made in instillments, ensuring proper tax compliance.

 

 

Circular No. 221/15/2024-GST I  Date: 26-06-2024

Subject: Time of Supply for Road Construction Services under HAM Model

Key Points:

                        Hybrid Annuity Model: Provides clarity on the time of supply for road construction and maintenance services under the HAM model, ensuring proper tax treatment.

 

 

Circular No. 222/16/2024-GST I  Date: 26-06-2024

Subject: Time of Supply for Spectrum Usage Services

Key Points:

                        Deferred Payment Options: Clarifies the time of supply for spectrum usage services where payments are deferred, ensuring consistency in tax application.

 

 

No comments:

CBDT issues second round of frequently asked questions in relation to Direct Tax Vivad Se Vishwas Scheme, 2024

  This Tax Alert summarizes Circular No. 19/2024 dated 16 December 2024 (VSV 2- December Circular) issued by the Central Board of Direct Tax...