Certain Clarification on applicability of GST on certain services
1. GST Not applicable on Penal Charges levied by Banks and NBFCs.
As per the 55th GST Council ‘s recommendation, no GST is payable on penal charges imposed by banks and NBFCs for loan non compliance under RBI’s 18-08-2023 guidelines.
2. GST Exemption for Payment Aggregator on Small Transaction.
As per the 55th GST Council ‘s recommendation, RBI-regulated Payment Aggregators are eligible for GST exemption on small transaction up to Rs.2000, but this exemption is limited to settlement services and does not apply to payment Gateways.
3. GST on Research and development services by Government entities regularization and exemption
No GST is applicable on Research and development services funded by government grants from 10-10-2024 onwards. For the past period (01-07-2017 to 09-10-2024), any GST already paid will not be refunded and unpaid GST will not be demanded.
4. GST Exemption restored for Skilling services by NSDC- approved training partner.
From 16-01-2025 onwards, skilling services by NSDC approved training partner are again exempt from GST.For the period 10-10-2024 to 15-01-2025, GST payments are regularized , ensuring no additional tax liability or refund issues.
5. GST Applicability on Facility Management Services provided to MCD Headquarters.
The Municipal Corporation of Delhi sought clarification on whether Facility management Services (Housekeeping, Civil maintenance, furniture maintenance and horticulture) provided for the upkeep of its head quarters are exempt from GST under SI No 3A of Notification No 12/2017-CTR.
As per the 55th GST Council Recommendation, Facility management services provided to MCD headquarters are not exempt from GST under SI No 3A of Notification No 12/2017-CTR.
6. Delhi Development Authority is not Local Authority under GST.
As per the 55th GST Council’s recommendation, DDA is not local authority under GST law. To qualify as Local authority, the entity must be self-governing and similar to municipal body. DDA does not meet these crieteria, as it is not elected self governing body and does not control municipal /local fund. Hence service provided by DDA will not qualify for RCM treatment under Notification No 13/2017-CTR.
7. GST on Renting of Commercial Property by Unregistered Persons Regularization for Composition taxpayer.
From 10-10-2024, GST on Renting of Commercial property by an unregistered person to registered person was brought under RCM as per Notification No 09/2024-CTR dated 08-10-2024.This changes applied to all registered taxpayers, including those under the Composition levy. From 16-01-2025 onwards, Composition taxpayers are no longer liable for GST under RCM on renting of Commercial property. For the period 10-10-2024 to 15-01-2025, Past GST payments are regularised, ensuring no additional tax liability or refunds.
8. GST Exemption for Support services by Electricity Utilities- Regularization for past period
54th Council recommended exempting certain support services provided by electricity transmission and distribution utilities such as Meter rental, Testing of meters and Transformers, Connection release , Meter shifting and duplicate bill issuance .These services were exempted from GST effective from 10-10-2024. From 16-01-2025 onwards, support service by electricity utilities are fully exempt from GST. for the period 10-10-2024 to 15-01-2025, GST payments are regularised to avoid disputes.
9. GST Regularization for services provided by Goethe Institute/ Max Mueller Bhawan
Goethe Institute/Max Mueller Bhawan operates six institute across India (Delhi, Mumbai, Chennai, Bengaluru, Kolkata and Pune). These institutes offer linguistic and cultural training to students preparing for their stay in Germany. Before 01-04-2023, the institute did not collect or pay GST, believing that their services were exempt from GST.Later it was clarified that GST was applicable on their services. GST payments for Goethe Institute/Max Mueller Bhawan from 01-07-2017 to 31-03-2023 are regularized, ensuring no compliance disputes for the past period.
