CBIC Exempts UTGST on Railway & Accommodation Services

Central Board of Indirect Taxes and Customs (CBIC) has recently announced significant changes through Notification No. 04/2024-Union Territory Tax (Rate) dated July 12, 2024. These amendments aim to implement the recommendations of the 53rd GST Council Meeting. Effective from July 15, 2024, the CBIC has exempted Union Territory Goods and Services Tax (UTGST) on several services provided by Indian Railways and specific accommodation services.

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. These services include:

• Sale of Platform Tickets: Passengers can now access platforms without the additional burden of UTGST on platform ticket purchases.
• Retiring Rooms/Waiting Rooms: The use of retiring rooms and waiting rooms at railway stations is now more economical for passengers, as these services are exempted from UTGST.
• Cloak Room Services: Passengers can utilize cloak room facilities without incurring UTGST charges.
• Battery-Operated Car Services: These services, often used by elderly and differently-abled passengers for easier mobility within railway stations, are now exempted from UTGST.

Additionally, intra-railway transactions between different zones or divisions under the Ministry of Railways are also exempted from UTGST. 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.
• 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 is effective retrospectively from July 1, 2017, addressing any tax liabilities that may have arisen in the past.

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 UTGST.
• Continuous Stay Requirement: To qualify for this exemption, the accommodation service must be provided for a minimum continuous period of 90 days.

Additionally, the exemption specifically excludes accommodation services for students in student residences, as well as hostels, camps, and paying guest accommodations.

Impact of the Amendments

These exemptions have several positive implications:

• For the General Public: The exemption on railway services reduces the cost burden on passengers, making railway travel more affordable.
• For Indian Railways: The exemption on intra-railway transactions and services provided by SPVs simplifies tax compliance and reduces the financial burden on Indian Railways.
• For the Accommodation Sector: The exemption for specific accommodation services encourages longer stays, benefiting service providers and customers alike.

Conclusion

The CBIC’s amendments through Notification No. 04/2024-Union Territory Tax (Rate) reflect a significant step towards easing the tax burden on essential services and promoting economic activities. By exempting UTGST 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- Union Territory Tax (Rate) | Dated: 12th July, 2024

G.S.R. 390(E).— In exercise of the powers conferred by sub-sections (3) and (4) of section 7, sub­section (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 amendments further to amend in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), 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, –

(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 – (g) sale of platform tickets; (h) facility of retiring rooms/waiting rooms; (i) cloak room services; (j) 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 15^th day of July, 2024.

[F.No. CBIC-190354/94/2024-TO(TRU-II)-CBEC]
Dr. PUNEETA BEDI, Director

Note: The principal notification was published in the Gazette of India, Extraordinary, vide notification no. 12/2017 – Union Territory Tax (Rate), dated the 28^th June, 2017, vide number G.S.R. 703 (E), dated the 28th June, 2017 and last amended vide notification No. 13/2023 – Union Territory Tax (Rate), dated the 19^th October, 2023 published in the official gazette vide number G.S.R. 764(E), dated the 19^th October, 2023.