On the 19th of October, 2023, the Ministry of Finance, Department of Revenue, Government of India, issued Notification No. 13/2023- Union Territory Tax (Rate). This notification brings about significant changes to Union Territory tax rates in the country. The amendments primarily focus on services provided to Governmental Authorities, water supply, public health, sanitation conservancy, solid waste management, and slum improvement and upgradation. This article delves into a detailed analysis of these amendments and their practical implications.
Detailed Analysis:
1. Addition of Serial Number 3B: The notification introduces a new serial number, 3B, which pertains to Chapter 99. It deals with services offered to Governmental Authorities, covering various essential services such as water supply, public health, sanitation conservancy, solid waste management, and slum improvement and upgradation. These services are set at a nil rate, meaning they may be exempt from Union Territory tax.
2. Amendments to Serial Numbers 6 to 9: Changes have been made to these serial numbers in column (3). They affect the application of tax rates for services related to the Department of Posts. Notably, the Ministry of Railways (Indian Railways) is included alongside the Department of Posts. This change aims to streamline and clarify tax rates for these specific services.
3. Amendments to Serial Number 8 – Proviso: In the proviso section, item (i) now includes the Ministry of Railways (Indian Railways) alongside the Department of Posts. This inclusion suggests that tax rates may differ based on the service provider, emphasizing the importance of compliance with these updated provisions.
Conclusion:
Notification No. 13/2023- Union Territory Tax (Rate) introduces crucial amendments to the existing tax rates, particularly focusing on services provided to Governmental Authorities in the domains of water supply, public health, sanitation conservancy, solid waste management, and slum improvement and upgradation. The introduction of a nil tax rate for these services may have significant implications for both service providers and recipients.
Additionally, the inclusion of the Ministry of Railways (Indian Railways) alongside the Department of Posts in several serial numbers serves to clarify and standardize tax rates for these specific services. However, it also emphasizes the need for compliance with the updated provisions to avoid any unintended tax discrepancies.
These amendments, effective from the 20th of October, 2023, reflect the government’s commitment to creating a transparent and standardized tax environment. To ensure compliance and avoid potential consequences associated with non-compliance, it is essential for businesses, individuals, and Governmental Authorities involved in these services to understand these regulatory changes and adjust their practices accordingly.
The illustrative examples included in the notification help in comprehending the practical implications of these changes. This added guidance enhances clarity and assists taxpayers, businesses, and service providers in adhering to the law while adapting to the updated tax provisions.
In conclusion, Notification No. 13/2023 is a pivotal development in the country’s tax framework, designed to enhance fairness and standardization while ensuring that tax rates align with the public interest and government objectives. It is essential for all relevant parties to familiarize themselves with these amendments and make any necessary adjustments to remain compliant with the law.
Government of India
Ministry of Finance
(Department of Revenue)
Notification No. 13/2023- Union Territory Tax (Rate)|Dated: 19th October, 2023
G.S.R. 764(E).-In exercise of the powers conferred by sub-sections (3) and (4) of section 7, sub- section (1) of section 8 and clause (iv) and clause (xxvii) of section 21 of the Union territory Goods and Services Tax Act, 2017 (14 of 2017), read with sub-section (5) of section 15 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following amendment further to amend the notification of the Government of India, in the Ministry of Finance (Department of Revenue), notification no. 12/2017 – Union Territory Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 703 (E), dated the 28th June, 2017, namely: –
In the said notification, in the Table, –
(1.) after serial number 3A and the entries relating thereto, the following serial number and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | (5) |
| “3B | Chapter 99 | Services provided to a Governmental Authority by way of –
(a) water supply; (b) public health; (c) sanitation conservancy; (d) solid waste management; and (e) slum improvement and upgradation. |
Nil | Nil”; |
(2) against serial number 6, in column (3),in item (a), after the words “Department of Posts”, the words and brackets “and the Ministry of Railways (Indian Railways)” shall be inserted;
(3) against serial number 7, in column (3), in the Explanation, in item (a), in sub-item(i), after the words “Department of Posts”, the words and brackets “and the Ministry of Railways (Indian Railways)”shall be inserted;
(4) against serial number 8, in column (3)in the proviso, in item (i), after the words “Department of Posts”, the words and brackets “and the Ministry of Railways (Indian Railways)” shall be inserted;
(5) against serial number 9,in column (3), in the first proviso, in item (i), after the words “Department of Posts”, the words and brackets“and the Ministry of Railways (Indian Railways)” shall be inserted;
2. This notification shall come into force with effect from the 20th day of October, 2023.
[F. No. CBIC-190354/195/2023-TO (TRU-II)-CBEC]
(Rajeev Ranjan)
Under Secretary to the Government of India
Note: The principal notification no. 12/2017 – Union Territory Tax (Rate), dated the 28th June, 2017,was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) , vide number G.S.R. 703 (E), dated the 28th June, 2017 and was last amended vide notification no. 07/2023 – Union Territory Tax (Rate), dated the 26th July, 2023 published in the Gazette of India, Extraordinary, Part II , Section 3 , Sub-section (i) , vide number G.S.R. 542(E), dated the 26th July, 2023.
