Clarifications regarding applicability of GST on certain services

Circular No.: 234/28/2024-GST
Date of Circular: 11th October 2024
Relevant Sections and Rules:

• CGST Act, 2017: Sections 2(78), 7, 9, 11, 16, 17, 168
• IGST Act, 2017: Sections 2(6), 13, 5
• Notifications:
  • 12/2017-CT(R) dated 28.06.2017
  • 08/2024-CT(R) dated 08.10.2024
  • 07/2024-CT(R), 08/2024-IT(R)
• Relevant SAC Headings: 9973, 9996

Summary of Clarifications Provided:

1. GST on Affiliation Services by Universities to Colleges:
   Affiliation services provided by universities (granting recognition to colleges to conduct academic programs) are not covered under exemptions for educational services under Notification No. 12/2017-CT(R).
   ➤ GST at 18% applies.
2. GST on Affiliation Services by Educational Boards to Schools:
   Affiliation services by Central/State boards to schools are taxable.
   However, affiliation services to government schools (owned or controlled by government bodies) are exempt w.e.f. 10.10.2024 via Notification No. 08/2024-CT(R).
   ➤ Past tax liability (01.07.2017–17.06.2021) is regularized on ‘as is where is’ basis.
3. GST Exemption for DGCA-Approved Flying Training Courses:
   Flying Training Organizations (FTOs) approved by DGCA, offering approved flying courses with a mandatory completion certificate, qualify as educational institutions under GST law.
   ➤ Such services are exempt under Sl. No. 66 of Notification No. 12/2017-CT(R).
4. GST on Helicopter Passenger Transport (Seat Share Basis):
   GST rate on helicopter passenger transport (seat share basis) is now 5% w.e.f. 10.10.2024.
   ➤ Past GST paid from 01.07.2017 to 09.10.2024 is regularized on ‘as is where is’ basis.
   ➤ Charter services by helicopter continue to attract 18% GST.
5. GTA Services and Incidental Charges (Loading, Packing, etc.):
   Ancillary services like loading, unloading, packing, transshipment, when provided by Goods Transport Agencies (GTAs) as part of road transportation, are treated as composite supply.
   ➤ GST rate as applicable to GTA service applies, even if charges are separately mentioned.
   ➤ However, if these services are not part of transport and are billed separately, they are treated as independent taxable services.
6. Import of Services by Foreign Airlines (From Related Persons) Without Consideration:
   Services imported by foreign airline establishments in India from related persons without consideration are now exempt w.e.f. 10.10.2024 (via Notification No. 08/2024-IT(R)).
   ➤ Past GST paid from 01.07.2017 to 09.10.2024 is regularized on ‘as is where is’ basis.
7. GST on Preferential Location Charges (PLC):
   PLC collected as part of consideration for sale of residential or commercial properties is integral to construction service.
   ➤ GST applies at same rate as main construction service, if charged before completion certificate.
8. Exemption for Ancillary Services by Electricity Distribution Utilities:
   Services like meter rental, connection/release, testing, shifting, issuing duplicate bills, etc. provided by electricity distribution companies are exempt from 10.10.2024.
   ➤ GST collected from 01.07.2017 to 09.10.2024 on these services is regularized.
9. GST on Distribution Rights for Films (2017–2021):
   Transactions where film distributors granted theatrical rights to exhibitors are regularized at 18% GST, based on clarification and Council recommendations.
   ➤ GST paid on such services from 01.07.2017 to 30.09.2021 is regularized on ‘as is where is’ basis.

Source: Circular No.: 234/28/2024-GST