Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Saturday, January 6, 2018

CBEC issues clarification on 04.01.18 on Accommodation Services, Home stay, Printing and legal services

CBEC Clarification regarding levy of GST on accommodation services, homestays, printing, legal services etc on 04.01.2018
Accommodation Services
1. Re : Whether GST will be charged on actual tariff for accommodation services : Declared or published tariff is relevant only for determination of the tax rate slab. GST will be payable on the actual transaction value.
 2. Re: Whether GST rate will change if cost goes up more than the tariff  due to additional bed etc .: GST rate would be determined according to declared tariff for the room, and GST at the rate so determined would be levied on the entire amount charged from the customer. For example, if the declared tariff is Rs. 7000 per unit per day but the amount charged from the customer on account of extra bed is Rs. 8000, GST shall be charged at 18% on Rs. 8000.
3. Re: Ascertainment of the declared tariff : Tariff declared anywhere, say on the websites through which business is being procured or printed on tariff card or displayed at the reception will be the declared tariff. In case different tariff is declared at different places, highest of such declared tariffs shall be the declared tariff for the purpose of levy of GST.
4. Re: What rate in case of different tariff at different times depending on season or flow of tourists:  In case different tariff is declared for different seasons or periods of the year, the tariff declared for the season in which the service of accommodation is provided shall apply.
5. Re : In Case tariff differs between booking and actual usage : in case of Declared tariff at the time of supply would apply.
6. Re: In case tariff changes at the time of up gradation: If declared tariff of the accommodation provided by way of upgrade is Rs 10000, but amount charged is Rs 7000, then GST would be levied @ 28% on Rs 7000/-
7. Re: Whether Price or declared tariff includes the tax component or not in case of accommodation in hotels, inns etc. : Price/ declared tariff does not include taxes.
8.Re: Room rent in hospitals to in patients : The room rent in hospitals is exempt.
9. Re : The rate of tax on bakery items : In case bakery items are supplied by a bakery where eating place is attached to manufacturer for the purpose of composition levy in such case any service by way of serving of food or drinks including by a bakery qualifies under section 10 (1) (b) of CGST Act and hence GST rate of composition levy for the same would be 5%.
10. Re : Homestays providing accommodation through an Electronic Commerce Operator, below threshold limit are exempt from taking registration: Vide Notification No. 17/2017-Central Tax (Rate), GST in case of accommodation services provided in hotels, inns guest houses or other commercial places meant for residential or lodging purposes provided by a person having turnover below Rs. 20 lakhs (Rs. 10 lakhs in special category states) per annum are not required to take registration and such persons, even though they provide services through ECO, are not required to take registration.
Supply of Books :
CBEC has given clarification whether supply in the situations listed below shall be treated as a supply of goods or supply of service:
 1. The books are printed/ published/ sold on procuring copyright from the author or his legal heir as is the case of White Tiger Procures copyright from Ruskin Bond.
2. The books are printed/ published/ sold against a specific brand name like Manorama Year Book  
3. The books are printed/ published/ sold on paying copyright fees to a foreign publisher for publishing Indian edition of foreign books as is the case of Penguin (India) Ltd. pays fees to Routledge (London) and Ananda Publishers Ltd. pays fees to Penguin (NY)
The supply of books shall be treated as supply of goods as long as the supplier owns the books and has the legal rights to sell those books on his own account.

Provision of Legal Service to Business entity
Re : Legal services other than representational services provided by an individual advocate to a business entity are liable for GST under reverse charge mechanism:

In case of legal services including representational services provided by an advocate including a senior advocate to a business entity, GST is required to be paid by the recipient of the service under reverse charge mechanism, i.e. the business entity.

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