Circular No. 27/01/2018-GST [C10-0ZJ]

Representations were received from trade and industry for clarification on certain issues regarding levy of GST on supply of services.

2. In this context, it is stated that the following clarifications, inter-alia, were published as FAQ at http://www.cbec.gov.in/resources//htdocs-cbec/gst/om-clarification.pdf.

S.No. Questions/ Clarifications sought Clarifications

1 1. Will GST be charged on actual tariff 1. Declared or published tariff is relevant or declared tariff for accommodation only for determination of the tax rate services? slab. GST will be payable on the actual

2. What will be GST rate if cost goes amount charged (transaction value). up (more than declared tariff) owing 2. GST rate would be determined to additional bed. according to declared tariff for the

3. Where will the declared tariff be room, and GST at the rate so determined published? would be levied on the entire amount

4. Same room may have different tariff charged from the customer. For at different times depending on example, if the declared tariff is Rs. season or flow of tourists as per 7000 per unit per day but the amount dynamic pricing. Which rate to be charged from the customer on account used then? of extra bed is Rs. 8000, GST shall be

5. If tariff changes between booking charged at 18% on Rs. 8000. and actual usage, which rate will be 3. Tariff declared anywhere, say on the used? websites through which business is

6. GST at what rate would be levied if being procured or printed on tariff card

Circular No. 27/01/2018-GST

an upgrade is provided to the or displayed at the reception will be the customer at a lower rate? declared tariff. In case different tariff is declared at different places, highest of such declared tariffs shall be the declared tariff for the purpose of levy of GST.

4. In case different tariff is declared for different seasons or periods of the year, the tariff declared for the season in which the service of accommodation is provided shall apply.

5. Declared tariff at the time of supply would apply.

6. If declared tariff of the accommodation provided by way of upgrade is Rs 10000, but amount charged is Rs 7000, then GST would be levied @ 28% on Rs 7000/-.

2 Vide notification No. 11/2017-Central Relevant part of entry 34 of the said CGST Tax (Rate) dated the 28th June 2017 notification reads as under: entry 34, GST on the service of “Heading 9996 (Recreational, cultural and admission into casino under Heading sporting services) - … 9996 (Recreational, cultural and sporting (iii) Services by way of admission to services) has been levied @ 28%. Since entertainment events or access to the Value of supply rule has not specified amusement facilities including exhibition of the method of determining taxable cinematograph films, theme parks, water amount in casino, Casino Operators have parks, joy rides, merry-go rounds, go- been informed to collect 28% GST on carting, casinos, race-course, ballet, any gross amount collected as admission sporting event such as Indian Premier charge or entry fee. The method of levy League and the like. - 14% adopted needs to be clarified. (iv)…

(v) Gambling. - 14 %” As is evident from the notification, “entry to casinos” and “gambling” are two different services, and GST is leviable at 28% on both these services (14% CGST and 14% SGST) on the value determined as per section 15 of the CGST Act. Thus, GST @ 28% would apply on entry to casinos as well as on betting/ gambling services being provided by casinos on the transaction value of betting, i.e. the total bet value, in addition to GST levy on any other services being

Circular No. 27/01/2018-GST

provided by the casinos (such as services by way of supply of food/ drinks etc. at the casinos). Betting, in pre-GST regime, was subjected to betting tax on full bet value.

3 The provision in rate schedule GST would be leviable on the entire bet notification No. 11/2017-Central Tax value i.e. total of face value of any or all (Rate) dated the 28th June 2017 does not bets paid into the totalisator or placed with clearly state the tax base to levy GST on licensed book makers, as the case may be. horse racing. This may be clarified. Illustration: If entire bet value is Rs. 100, GST leviable will be Rs. 28/-.

4 1. Whether for the purpose of entries at 1. Price/ declared tariff does not include Sl. Nos. 34(ii) [admission to cinema] taxes. and 7(ii)(vi)(viii) [Accommodation in 2. Room rent in hospitals is exempt. hotels, inns, etc.], of notification 3. Any service by way of serving of food 11/2017-CT (Rate) dated 28th June or drinks including by a bakery 2017, price/ declared tariff includes qualifies under section 10 (1) (b) of the tax component or not? CGST Act and hence GST rate of

2. Whether rent on rooms provided to composition levy for the same would in-patients is exempted? If liable to be 5%. tax, please mention the entry of CGST Notification 11/2017- CT(Rate)

3. What will be the rate of tax for bakery items supplied where eating place is attached - manufacturer for the purpose of composition levy?

5 Whether homestays providing Notification No. 17/2017-Central Tax accommodation through an Electronic (Rate), has been issued making ECOs liable Commerce Operator, below threshold for payment of GST in case of limit are exempt from taking accommodation services provided in hotels, registration? inns guest houses or other commercial places meant for residential or lodging purposes provided by a person having turnover below Rs. 20 lakhs (Rs. 10 lakhs in special category states) per annum and thus not required to take registration under section 22(1) of CGST Act. Such persons, even though they provide services through ECO, are not required to take registration in view of section 24(ix) of CGST Act, 2017.

6 To clarify whether supply in the The supply of books shall be treated as situations listed below shall be treated as supply of goods as long as the supplier a supply of goods or supply of service: - owns the books and has the legal rights to

Circular No. 27/01/2018-GST

1. The books are printed/ published/ sold sell those books on his own account. on procuring copyright from the author or his legal heir. [e.g. White Tiger Procures copyright from Ruskin Bond]

2. The books are printed/ published/ sold against a specific brand name. [e.g. Manorama Year Book]

3. The books are printed/ published/ sold on paying copyright fees to a foreign publisher for publishing Indian edition (same language) of foreign books. [e.g. Penguin (India) Ltd. pays fees to Routledge (London)] The books are printed/ published/ sold on paying copyright fees to a foreign publisher for publishing Indian language edition (translated). [e.g. Ananda Publishers Ltd. pays fees to Penguin (NY)]

7 Whether legal services other than Yes. In case of legal services including representational services provided by an representational services provided by an individual advocate or a senior advocate advocate including a senior advocate to a to a business entity are liable for GST business entity, GST is required to be paid under reverse charge mechanism? by the recipient of the service under reverse charge mechanism, i.e. the business entity.

3. The above clarifications are reiterated for the purpose of levy of GST on supply of services.

4. Difficulty if any, in the implementation ofthe circular should be brought to the notice of the Board. Hindi version would follow.