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Clarifications on GST Applicability: Circular No. 206/18/2023-GST


The Goods and Services Tax (GST) regime in India is subject to periodic updates and clarifications to ensure smooth implementation and compliance. Circular No. 206/18/2023-GST, issued by the Department of Revenue, Ministry of Finance, Government of India, addresses various aspects of GST applicability on certain services. Let's delve into the key clarifications provided in the circular:

1.     Scope of 'Same Line of Business' in Passenger Transport and Vehicle Renting

The circular clarifies whether leasing of motor vehicles without operators falls under the same line of business as passenger transport services. This distinction is crucial for determining GST applicability.

2.     GST on Reimbursement of Electricity Charges by Real Estate Entities

It provides clarity on whether GST is applicable on reimbursement of electricity charges by entities such as real estate companies, malls, and airport operators from their lessees or occupants.

3.     GST Rate for Job Work on Barley Processing

The circular addresses the GST rate applicable to job work involving the processing of barley into malted barley. It clarifies whether such activity falls under the GST rate of 5% applicable to job work related to food and food products or the 18% rate applicable to job work related to the manufacture of alcoholic liquor for human consumption.

4.     Treatment of District Mineral Foundations Trusts (DMFTs):

It examines whether DMFTs established by State Governments qualify as Governmental Authorities for GST exemptions, similar to other governmental bodies.

5.     GST Applicability on Horticulture Services

 The circular elucidates on the GST applicability regarding the supply of pure services and composite supplies related to horticulture or horticulture works, especially focusing on the proportion of goods involved in such supplies.

These clarifications are essential for taxpayers, businesses, and authorities to ensure accurate interpretation and implementation of GST regulations. Compliance with these guidelines facilitates smoother transactions and reduces the risk of disputes or non-compliance.

It's imperative for stakeholders to review Circular No. 206/18/2023-GST in detail and seek professional advice if necessary to ensure adherence to GST laws and regulations, thereby contributing to a transparent and efficient tax system in India.

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