The Ministry of Finance, Department of Revenue, Government of India, has released a significant notification, No. 16/2023-Union Territory Tax (Rate), dated 19th October, 2023. This notification introduces amendments to the Union Territory Goods and Services Tax (UTGST) rates, as recommended by the Council. The changes have a direct impact on the taxation of specific services in Union Territories. In this article, we will examine the details of this notification and its implications.
Detailed Analysis:
1. Amendment Summary: Notification No. 16/2023-Union Territory Tax (Rate) is issued under the powers conferred by sub-section (5) of section 7 of the Union Territory Goods and Services Tax Act, 2017. It amends the existing notification No.17/2017-Union Territory Tax (Rate), dated 28th June, 2017, published in the Gazette of India. These amendments affect the taxation of services in Union Territories.
2. Amendments Introduced: The notification introduces the following changes:
- In clause (i), it substitutes the words “omnibus or any other motor vehicle” with “or any other motor vehicle except omnibus.”
- It adds a new clause (ia) that specifies services by way of transportation of passengers by an omnibus, except when the service provider operates through an electronic commerce operator, and is a company.
- An explanation is added that defines “Company” in line with the Companies Act, 2013.
3. Effective Date: Notification No. 16/2023-Union Territory Tax (Rate) takes effect from the 20th day of October, 2023. It is essential for businesses and service providers to be aware of these changes and adapt their taxation processes accordingly.
Conclusion:
Notification No. 16/2023-Union Territory Tax (Rate) represents a significant development in the realm of Union Territory taxation in India. The amendments introduced by this notification have a direct impact on the taxation of passenger transportation services by omnibuses, particularly when services are provided through electronic commerce operators by companies.
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Government of India
Ministry of Finance
(Department of Revenue)
Notification No. 16/2023- Union Territory Tax (Rate) | Dated: 19th October, 2023
G.S.R.773(E).-In exercise of the powers conferred by sub-section (5) of section 7 of the Union Territory Goods and Services Tax Act, 2017 (14 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), No.17/2017-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. 708(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-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. 708 (E), dated the 28th June, 2017 and was last amended by notification No. 17/2021 –Union Territory Tax (Rate), dated the 18th November, 2021 vide number G.S.R. 815(E), dated the 18th November, 2021.
