Ministry of Finance issues Clarifications regarding GST in respect of certain services as decided in 25th GST Council meeting

The Tax Research Unit, Ministry of Finance has issued clarifications regarding GST in respect of certain services with regard to the following issues approved by the GST Council in its 25th meeting held on January 18, 2018:

1.       Is hostel accommodation provided by Trusts to students covered within the definition of Charitable Activities and thus, exempt under Sl. No. 1 of notification No. 12/2017-CT (Rate).

2.       Is GST leviable on the fee/amount charged in the following situations/cases: –

(1) A customer pays fees while registering complaints to Consumer Disputes Redressal Commission office and its subordinate offices. These fees are credited into State Customer Welfare Fund’s bank account.

(2)Consumer Disputes Redressal Commission office and its subordinate offices charge penalty in cash when it is required.

(3) When a person files an appeal to Consumers Disputes Redressal Commission against order of District Forum, amount equal to 50% of total amount imposed by the District Forum or Rs. 25,000/- whichever is less, is required to be paid.

3.       Whether the services of elephant or camel ride, rickshaw ride and boat ride should be classified under heading 9964 (as passenger transport service) in which case, the rate of tax on such services will be 18% or under the heading 9996 (recreational, cultural and sporting services) treating them as joy rides, leviable to GST at the rate of 28%?

4.       What is the GST rate applicable on rental services of self-propelled access equipment (Boom Scissors/ Tele-handlers)? The equipment is imported at GST rate of 28% and leased further in India where operator is supplied by the leasing company, diesel for working of machine is supplied by customer and transportation cost including loading and unloading is also paid by the customer.

5.       Is GST leviable in following cases:

(1) Hospitals hire senior doctors/ consultants/ technicians independently, without any contract of such persons with the patient; and pay them consultancy charges, without there being any employer-employee relationship. Will such consultancy charges be exempt from GST? Will revenue take a stand that they are providing services to hospitals and not to patients and hence must pay GST?

(2) Retention money: Hospitals charge the patients, say, Rs. 10,000/- and pay to the consultants/ technicians only Rs. 7,500/- and keep the balance for providing ancillary services which include nursing care, infrastructure facilities, paramedic care, emergency services, checking of temperature, weight, blood pressure etc. Will GST be applicable on such money retained by the hospitals?

(3) Food supplied to the patients: Health care services provided by the clinical establishments will include food supplied to the patients; but such food may be prepared by the canteens run by the hospitals or may be outsourced by the Hospitals from outdoor caterers. When outsourced, there should be no ambiguity that the suppliers shall charge tax as applicable and hospital will get no ITC. If hospitals have their own canteens and prepare their own food; then no ITC will be available on inputs including capital goods and in turn if they supply food to the doctors and their staff; such supplies, even when not charged, may be subjected to GST.

6.       Taxability of Cost Petroleum.

[Circular No. 32/06/2018-GST]