On the 19th of October, 2023, the Ministry of Finance, Department of Revenue, Government of India, issued Notification No. 19/2023-Integrated Tax (Rate). This notification introduces significant amendments to the taxation of passenger transportation services. In this article, we will delve into the details of these changes and their potential implications.
Detailed Analysis:
1. Modification of Clause (i): The notification modifies clause (i) of the existing regulation by substituting the words “omnibus or any other motor vehicle” with the words “or any other motor vehicle except omnibus.” This change refines the scope of the tax regulation.
2. Introduction of Clause (ia): A new clause (ia) is inserted, which addresses “services by way of transportation of passengers by an omnibus.” However, this clause comes with an exception – it doesn’t apply if the service provider is a company supplying services through an electronic commerce operator. This exception distinguishes between different service providers.
3. Explanation for “Company”: An explanation to the notification clarifies the definition of “Company,” aligning it with the meaning as assigned in clause (20) of section 2 of the Companies Act, 2013 (18 of 2023). This definition aids in differentiating entities subject to the taxation.
Conclusion:
Notification No. 19/2023-Integrated Tax (Rate) issued by the Ministry of Finance, Department of Revenue, Government of India, brings about substantial amendments to the taxation of passenger transportation services, particularly services involving omnibuses. These changes differentiate the tax regulations based on the service provider’s status as a company and their mode of service provision.
These amendments will become effective from the 20th of October, 2023. It is imperative for businesses and individuals involved in the passenger transportation industry to comprehend and adhere to these modified tax regulations. The introduction of specific clauses and exceptions emphasizes the need for a thorough understanding of the legal framework in this sector.
These changes aim to streamline and refine the tax structure in passenger transportation, providing clarity for entities engaged in this sector and ensuring compliance with the updated tax structure in India.
Government of India
Ministry of Finance
(Department of Revenue)
Notification No. 19/2023-Integrated Tax (Rate) |Dated: 19th October, 2023
G.S.R.772(E).- In exercise of the powers conferred by sub-section (5) of section 5 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following amendments further to amend the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.14/2017-Integrated 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. 689(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 to the notification, 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 2023).”.
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. 14/2017 –Integrated Tax (Rate), dated the 28th June, 2017, vide number G.S.R. 689(E), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) and was last amended by notification No. 17/2021 –Integrated Tax (Rate), dated the 18th November, 2021 vide number G.S.R. 814(E), dated the 18th November, 2021.
