The Government of India, Ministry of Finance, Department of Revenue, recently issued Notification No. 16/2023-Central Tax (Rate) dated 19th October, 2023. This notification introduces significant amendments to the Central Goods and Services Tax Act, 2017. In this article, we will delve into the details of these changes and their implications for various sectors.
Detailed Analysis:
1. Amendment to Clause (i): The notification modifies clause (i) to exclude omnibuses from the definition of “motor vehicle.” It explicitly states, “any other motor vehicle except omnibus.” This change indicates a reclassification in the tax rate for omnibuses.
2. Introduction of Clause (ia): A new clause (ia) has been introduced, which addresses services involving the transportation of passengers by an omnibus. Notably, this clause exempts companies supplying such services through electronic commerce operators from this exemption.
3. Explanation Item (d): The notification defines “Company” as per the Companies Act, 2013. This definition is crucial for understanding the exemption criteria mentioned in clause (ia).
4. Effective Date: The notification comes into effect on the 20th day of October, 2023. Businesses and individuals affected by these changes must adapt to the new tax rates and regulations from this date.
Conclusion:
The Government of India, through the Ministry of Finance, has made significant amendments to the Central Goods and Services Tax Act, 2017, with Notification No. 16/2023. These changes primarily impact the classification and taxation of omnibuses in the transportation sector.
Businesses and individuals dealing with the transportation of passengers via omnibuses need to take note of these changes. Companies supplying such services through electronic commerce operators may not benefit from the exemption provided in clause (ia).
It’s imperative for affected entities to stay informed and compliant with these regulatory adjustments to avoid any potential legal or financial consequences. The effective date of 20th October, 2023, marks the commencement of these amendments, and timely adaptation is essential.
Government of India
Ministry of Finance
(Department of Revenue)
Notification No. 16/2023-Central Tax (Rate) | Dated: 19th October, 2023
G.S.R. 771(E).– In exercise of the powers conferred by sub-section (5) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), notification No. 17/2017 -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. 696(E) dated the 28th June, 2017, namely:-
In the said notification,
(i) in clause (i), for the words “omnibus or any other motor vehicle”, the words “or any other motor vehicle except omnibus” shall be substituted;
(ii) after clause (i), the following clause shall be inserted, namely:-
“(ia) services by way of transportation of passengers by an omnibus except where the person supplying such service through electronic commerce operator is a company.”;
(iii) in the Explanation, after item (c), the following item shall be inserted, namely, –
“(d) “Company” has the same meaning as assigned to it in clause (20) of section 2 of the Companies Act, 2013(18 of 2013).”.
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. 17/2017 -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. 696 (E), dated the 28th June, 2017 and was last amended by notification No. 17/2021 -Central Tax (Rate), dated the 18th November, 2021 vide number G.S.R. 813(E), dated the 18th November, 2021.
