Central Board of Indirect Taxes and Customs (CBIC) has introduced significant amendments through Notification No. 04/2024-Central Tax (Rate) dated July 12, 2024. These changes, effective from July 15, 2024, are aimed at implementing the recommendations of the 53rd GST Council Meeting. The key amendments involve the exemption of Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) on various services provided by Indian Railways and specific accommodation services.
Introduction
The GST Council, in its 53rd meeting, made crucial recommendations to streamline tax policies and reduce the burden on essential services. Following these recommendations, the CBIC issued Notification No. 04/2024-Central Tax (Rate) to exempt certain services from CGST and SGST. These exemptions cover services provided by Indian Railways to the general public, intra-railway transactions, and specific accommodation services. This move is expected to have significant benefits for both service providers and recipients.
1. Exemption on Services Provided by Indian Railways
The notification exempts several services provided by Indian Railways to the general public, effective from July 15, 2024. The exempted services include:
- Sale of Platform Tickets: Passengers can now purchase platform tickets without the additional cost of GST. This exemption makes accessing railway platforms more economical for the public.
- Retiring Rooms/Waiting Rooms: The use of retiring rooms and waiting rooms at railway stations will be more affordable, as these services are now exempted from GST.
- Cloak Room Services: Passengers can utilize cloak room facilities without incurring GST charges, making it more convenient for those needing to store their luggage temporarily.
- Battery-Operated Car Services: These services, often used by elderly and differently-abled passengers for easier mobility within railway stations, are now exempted from GST.
Additionally, intra-railway transactions between different zones or divisions under the Ministry of Railways are also exempted from GST. This exemption applies retrospectively from October 20, 2023, regularizing any tax issues for the past period up to the issuance of this notification.
2. Exemption on Services by Special Purpose Vehicles (SPVs)
Another critical aspect of the notification is the exemption of GST on services provided by Special Purpose Vehicles (SPVs) to Indian Railways. This exemption covers:
- Usage of Infrastructure Built by SPVs: Indian Railways can now use infrastructure built and owned by SPVs during the concession period without the burden of GST. This exemption facilitates better utilization of infrastructure without additional tax liabilities.
- Maintenance Services: Maintenance services supplied by Indian Railways to SPVs in relation to the infrastructure built by the SPVs are also exempted from GST. This exemption ensures that the maintenance of essential infrastructure remains cost-effective.
This exemption is effective retrospectively from July 1, 2017, addressing any tax liabilities that may have arisen in the past and regularizing the issues on an ‘as is where is’ basis.
3. Exemption on Accommodation Services
The notification introduces a new entry in the existing notification No. 12/2017-Central Tax (Rate) dated June 28, 2017, to exempt specific accommodation services. The key points are:
- Accommodation Value: Accommodation services with a value of supply up to Rs. 20,000 per person per month are exempted from GST. This exemption benefits individuals and businesses seeking affordable long-term accommodation options.
- Continuous Stay Requirement: To qualify for this exemption, the accommodation service must be provided for a minimum continuous period of 90 days. This condition ensures that the exemption applies to long-term stays, which are often more economically significant.
Additionally, the exemption specifically excludes accommodation services for students in student residences, as well as hostels, camps, and paying guest accommodations. This clarification helps to delineate the scope of the exemption clearly.
The CBIC’s amendments through Notification No. 04/2024-Central Tax (Rate) represent a significant step towards easing the tax burden on essential services and promoting economic activities. By exempting GST on services provided by Indian Railways and specific accommodation services, the CBIC aligns with the broader objective of the GST Council to streamline tax policies and enhance public welfare
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MINISTRY OF FINANCE
(Department of Revenue)
New Delhi
Notification No. 04/2024 – Central Tax (Rate) | Dated: 12th July, 2024
G.S.R. 388(E).—In exercise of the powers conferred by sub-section (3) and sub-section (4) of section 9, subsection (1) of section 11, 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), No.12/2017-Central 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. 691(E), dated the 28th June, 2017, namely:—
In the said notification, in the Table, –
(A) after serial number 9D and the entries relating thereto, the following serial numbers and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | (5) |
| “9E | Chapter 99 | Services provided by Ministry of Railways (Indian Railways) to individuals by way of –
(a) sale of platform tickets; (b) facility of retiring rooms/waiting rooms; (c) cloak room services; (d) battery operated car services. |
Nil | Nil |
| 9F | Chapter 99 | Services provided by one zone/division under Ministry of Railways (Indian Railways) to another zone(s)/division(s) under Ministry of Railways (Indian Railways). | Nil | Nil |
| 9G | Chapter 99 | Services provided by Special Purpose Vehicles (SPVs) to Ministry of Railways (Indian Railways) by way of allowing Ministry of Railways (Indian Railways) to use the infrastructure built and owned by them during the concession period against consideration and services of maintenance supplied by Ministry of Railways (Indian Railways) to SPVs in relation to the said infrastructure built and owned by the SPVs during the concession period against consideration. | Nil | Nil”; |
(B) in serial number 12, –
(i) in column (2), the words and figures “Heading 9963 or” shall be omitted;
(ii) in column (3), the Explanation shall be numbered as Explanation 1 thereof, and after Explanation 1 so renumbered, the following Explanation shall be inserted, namely: –
“Explanation 2.- Nothing contained in this entry shall apply to-
(a) accommodation services for students in student residences;
(b) accommodation services provided by Hostels, Camps, Paying Guest accommodations and the like.”;
(C) after serial number 12 and the entries relating thereto, the following serial number and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | (5) |
| “12A | Heading 9963 | Supply of accommodation services having value of supply less than or equal to twenty thousand rupees per person per month provided that the accommodation service is supplied for a minimum continuous period of ninety days. | Nil | Nil”. |
2. This notification shall come into force with effect from the 15th day of July, 2024.
[F.No. CBIC-190354/94/2024-TO(TRU-II)-CBEC]
Dr. PUNEETA BEDI, Director
Note: The principal notification No. 12/2017 – Central 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. 691 (E), dated the 28th June, 2017 and was last amended vide notification No. 13/2023 – Central Tax (Rate), dated the 19th October, 2023 published in the Gazette of India, Extraordinary, Part II , Section 3 , Sub-section (i) vide number G.S.R. 762(E), dated the 19th October, 2023.
In a Hostel /PG/Camp etc. , the accomodation is provided normally with auxiliary services like mess , laundry , house keeping , wi fi etc. Are these included in the monthly charges under exemption or will be treated separately for GST , because it is not only difficult but impossible to segregate these charges for individual occupant.
Please clarify and elaborate.
J P Dubey
9425102171