Summary of the Circular No 234/28/2024
GST Clarification has been issued for the applicability of GST on certain services.
Key Points of Circular No 234/28/2024:
1. Applicability of GST on the service of affiliation provided by universities to colleges
2. Applicability of GST on the service of affiliation provided by Central and State educational boards or Councils, or other similar bodies, to schools
3. Applicability of GST on the Directorate General of Civil Aviation (DGCA) approved flying training courses conducted by Flying Training Organizations approved by the DGCA
4. Regularizing payment of GST on transport of passengers by helicopter.
5. Whether incidental/ ancillary services such as loading/ unloading, packing, unpacking, transshipment, temporary warehousing etc., provided in relation to transportation of goods by road is to be treated as part of Goods Transport Agency service, being composite supply, or these services are to be treated as separate independent supplies
6. Regularizing payment of GST on import of services by an establishment of a foreign airlines company from a related person or any of its establishment outside India, when made without consideration.
7. Applicability of GST on Preferential Location Charges (PLC) collected along with consideration for sale/ transfer of residential / commercial properties.
8. Regularizing payment of GST on certain support services provided by an electricity transmission or distribution utility.
9. Regularizing payment of GST on services of film distributors or sub-distributors who act on a principal basis to acquire and distribute films.
1. Applicability of GST on the service of affiliation provided by universities to colleges
Affiliation services provided by universities to colleges are subject to GST @ 18%. These services involve assessing whether a college has necessary infrastructure, staff and other resources to offer specific course or programs. Since these services are not directly related to student admission or exam conduct, they don’t fall under the exemption for educational institutions as per Notification no 12/2017-CTR. Therefore, universities need to charge GST on these services.
2. Applicability of GST on the service of affiliation provided by Central and State educational boards or Councils, or other similar bodies, to schools
Affiliation services provided by Central and state educational board or councils to schools are subject to GST. These services ensure that schools meet the necessary Infrastructure, staff and finance requirement to operate under board’s guidelines. Since these services are not related to student admission or exam conduct, they are taxable. However, an exemption is granted for affiliation services to government schools from 10-10-2024. Additionally GST Council has decided to regularise the payment of GST on such services for all schools for the period from 01-07-2017 to 17-06-2021. During this period, affiliation services were considered taxable at 18% based on previous clarification.
3. Applicability of GST on the Directorate General of Civil Aviation (DGCA) approved flying training courses conducted by Flying Training Organizations approved by the DGCA
Flying training course conducted by FTOS approved by DGCA are exempt from GST. Service provided by educational institutions are exempt if they lead to qualification recognised by law. Since the DGCA approves the training courses, mandates completion certificates,and recognizes the FTOS, these flying courses qualify as educational services under Sr No 66 of Notification No 12/2017, and therefore they are not subject to GST.
4. Regularizing payment of GST on transport of passengers by helicopter.
Helicopter Passanger Transportation: The GST rate for transporting passenger by helicopter on seat-sharing basis is set at 5% effective from 10-10-2024. any past payments for such services will be accepted “as is” basis for the period 01-07-2017 to 09-10-2024. However, chartering a helicopter will continue to attract an 18% GST rate.
5. Whether incidental/ ancillary services such as loading/ unloading, packing, unpacking, transshipment, temporary warehousing etc., provided in relation to transportation of goods by road is to be treated as part of Goods Transport Agency service, being composite supply, or these services are to be treated as separate independent supplies
- GTA Services: Services related to loading, unloading packing, unpacking, transshipment and temporary warehousing, provided during the transportation of goods by road are considered part of main transport service and treated as single composite supply.This means they are taxed together as part of transport service. if these services are provided separatley, they are taxed independently.
6. Regularizing payment of GST on import of services by an establishment of a foreign airlines company from a related person or any of its establishment outside India, when made without consideration.
The clarification states that foreign airline companies will no longer have to pay the GST when they receive services from their related companies or branches located outside india, as long as they do not pay for those services. This exemption takes effect from 10-10-2024. Additionally any past payments for such services from 01-07-2017 to 09-10-2024 will accepted “as is”basis.
7. Applicability of GST on Preferential Location Charges (PLC) collected along with consideration for sale/ transfer of residential / commercial properties.
The charges for selecting prefered location with in an apartment complex (Preferential Location Charges) are considered part of the overall construction service. Since these charges are bundled with construction service before the completion certificate is issued, they will be taxed at the same GST rate as construction services.This applies to residential, commercial and industrial complexes.
8. Regularizing payment of GST on certain support services provided by an electricity transmission or distribution utility.
Certain services provided by electricity transmission and distribution companies, such as renting metering equipment, testing meters, connecting or shifting electricity meters and issuing duplicate bills are now exempt from GST starting from 10-10-2024. These services are considered incidental to main service of electricity distribution.Additionally any GST payment made for these services between 01-07-2017 and 09-10-2024 will be accepted as is basis.
9. Regularizing payment of GST on services of film distributors or sub-distributors who act on a principal basis to acquire and distribute films.
Before 01-10-2021 there was some confusion about the GST rate on transaction where distributor granted theatrical rights to exhibition centers. Some authorities classified this services under one category with an 18% GST, while other placed it under different category with a12% GST. To solve this, from 01-10-2021 , a uniform GST rate of 18% was applied to these services.
The GST Council has now decided to accept the GST payments made on such transactions between 01-07-2017 and 30-09-2021, as is meaning no further adjustments will be required for that period.
