Notifications, Circulars And Instructions

2. ITC will be available in cases where cancellation of registration was revoked subject to prescribed conditions.

2. Similar provision inserted vide Section 6A of the IGST Act, Section 8A of the UTGST Act and Section 8A of the GST (Compensation to States) Act, 2017.

1. date of payment;

2. 60 days from date of issuance of invoice by supplier, where invoice is required to be issued by supplier; and

3. date of issuance of invoice by the recipient where invoice is required to be issued by supplier.

2. Section 16 of IGST Act amended to provide that no refund of unutilized ITC or IGST will be allowed in cases of zero-rated supply of goods where such goods are subjected to export duty.

1. removal of extended period to issue notices in cases involving fraud, suppression and willful misstatement;

2. time limit for issuance of notice i.e. 42 months from the due date of furnishing annual return;

3. time limit for issuance of order i.e. 12 months from the date of issuance of notice, extendable by further 6 months, subject to approval; and

4. provisions relating to payment of tax, interest and penalty remain same as prescribed for Section 73 and 74 of the CGST Act (except for extension of time allowed for payment of tax and interest from the date of issuance of notice/order).

1. with effect from August 1, 2024, appeal before the GSTAT to be filed within (a) three months from the date of the order; or (b) within a period proposed to be prescribed by the Government, whichever is later; and

2. reduction in the maximum pre-deposit payable while filing an appeal before the appellate authority from INR 25,00,00,000 to INR 20,00,00,000 (Section 107(6) of the CGST Act);

3. Reduction in the maximum pre-deposit payable while filing an appeal before GSTAT from 20% to 10% with a maximum limit of INR 20,00,00,000 instead of INR 50,00,00,000 (Section 112(6) of the CGST Act);

4. Section 20 of the IGST Act is amended to set a maximum pre-deposit amount of INR 40,00,00,000 for filing appeals before appellate authorities or GSTAT, replacing the previous thresholds of INR 50,00,00,000 and INR 100,00,00,000 respectively.

2. such waiver will be available in the following cases:

a) notice/statement issued under Section 73 of CGST Act;

b) order passed under Section 73(9) of CGST Act (Order-in-Original); and

c) order passed under Section 107(11) of CGST Act (Order-in-Appeal) or Section 108(1) of CGST Act (Revision Order);

3. matters pertaining to erroneous refund not covered;

4. benefit of this provision can be availed subject to payment of disputed tax and withdrawal of appeals/writ/application (within prescribed timeline);

5. appellate remedy against proceedings concluded under the said provision will not be available;

6. refund of interest and penalty already paid will not be permitted; and

7. any additional amount arising because of departmental appeal will be payable within 3 months from the date of such appellate order.

1. activity of apportionment of co-insurance premium by the lead insurer to the co-insurer for the insurance services jointly supplied by the lead insurer and the co-insurer to the insured under a coinsurance agreement, subject to payment of tax by lead insurer; and

2. reinsurer services for which ceding commission, or the reinsurance commission is deducted from reinsurance premium paid by the insurer to the reinsurer, provided that tax liability is discharged on the gross reinsurance premium inclusive of reinsurance commission or the ceding commission paid by the reinsurer.

Clarification in respect of place of supply of advertising services provided to foreign clients

a) the arrangement between (i) the foreign client and the advertising agency; and (ii) the advertising agency and the media company are in the nature of 2 distinct principal-to-principal arrangements. No agreement exists between the foreign client and the media company. The advertising agency is not acting as an agent but is providing the main supply of services on its own account. Therefore, it does not fulfill the criteria of 'intermediary' under Section 2(13) of the IGST Act. Hence the place of supply cannot be linked with the location of the supplier;

b) the foreign client is liable to pay consideration to the advertising agency and not the consumers or target audience that watches the advertisement in India. Even if a representative of the foreign client (including subsidiary or related person) is based in India, the said representative will be acting on behalf of the foreign client only. The advertising agency raises invoice upon and the payment for supply of service is also received directly from the foreign client. Therefore, the foreign client is only considered as the 'recipient' of service; and

c) the services provided by the advertising agency cannot be considered as performance based services as there is neither any involvement of goods which are required to be made physically available with the advertising agency nor there is any requirement of physical presence of the recipient (foreign client or its representative) with the advertising agency. Accordingly, the place of supply of advertising services will be location of the recipient, i.e., foreign client located outside India.

Therefore, the said advertising services can be considered as export of services, subject to fulfillment of conditions prescribed under Section 2(6) of the IGST Act.

2. However, for situations where the advertising agency in India merely acts as an agent of the foreign client in engaging the media company, the agreement for advertising services is directly between the foreign client and the media company. The media company raises direct invoices upon the foreign client, for which the foreign client makes direct payment to the media company. The advertising agency raises invoices upon the foreign client for facilitation of services. In such a case, the advertising agency is merely facilitating the provision of advertising services by media company to the foreign client and hence, is considered as an 'intermediary', for which the place of supply will be the location of the supplier, i.e., the location of the advertising agency.

Clarification on availability of ITC in respect of demo vehicles

1. Section 17(5)(a) of CGST Act restricts ITC on motor vehicles for transportation of passengers having approved seating capacity of not more than 13 persons, except when they are used for:

a) further supply of such motor vehicles;

b) transportation of passengers; or

c) imparting training on driving such motor vehicles.

Demo vehicles are apparently neither used for transportation of passengers nor imparting training. However, these are used for 'further supply of such motor vehicles' since these are neither themselves further supplied nor used for the purpose of further supply of similar type of motor vehicles. Demo vehicles help the potential buyers to make a decision to purchase a particular kind of motor vehicle. Therefore, as demo vehicles promote sale of similar type of motor vehicles, ITC of the same are not blocked under Section 17(5)(a) of CGST Act.

2. motor vehicles used for transportation of staff employees/management, etc. are also not blocked under Section 17(5)(a) of CGST Act;

3. availability of ITC on demo vehicles as per above is not affected even if the demo vehicles are capitalised in books of accounts by the dealer because the definition of 'goods' under Section 2(19) of the CGST Act includes capital goods. As these capital goods are used in the course or furtherance of business, ITC of these capital goods is allowed, subject to other provisions. However, where the dealer has claimed depreciation on the tax component of the cost of capital goods under the Income Tax Act, 1961, then ITC on the said tax component will not be allowed;

4. Where the dealer merely acts as an agent or service provider to the vehicle manufacturer for providing marketing service, including providing test drives to potential customers on behalf of the vehicle manufacturer and is not directly engaged in the purchase and sale of vehicles, then any demo vehicle that the dealer purchases from the vehicle manufacturer for providing the above services will not be considered as being used for making further supply of such motor vehicles. Accordingly, no ITC will be allowed for said demo vehicles;

Clarification on place of supply of data hosting services provided by service providers located in India to cloud computing service providers located outside India

2. Further, clarification is also provided on whether place of supply of service is to be determined as per Section 13(3)(a) of the IGST Act. Throughout the provision of services, the data hosting service provider owns the premise of data center or operates from leased premises and independently handles the premises as well as the equipment. In such scenario, the overseas cloud computing service providers cannot be considered to own the said infrastructure and make it physically available to the data hosting service provider. In light of the same, it has been clarified that, the place of supply of the said service cannot be determined under Section 13(3)(a) of the IGST Act.

3. Moreover, the data hosting services are not passive supply of a service directly in respect of immovable property but are regarding supply of comprehensive services related to data hosting which includes supply of various services by data hosting service providers like operating data center, backup generator, network connectivity, firewall services etc., which are essential for provision of cloud computing services. Hence, in such a scenario, the circular clarifies that data hosting services cannot be considered as services provided directly in relation to immovable property and place of supply cannot be determined under Section 13(4) of the IGST Act.

4. The place of supply of data hosting services will thus be determined in terms of Section 13(2) of the IGST Act, i.e., the location of the recipient of supply of service.

Regularisation of refund of IGST availed in contravention of Rule 96(10) of CGST Rules⁴, where exporters had imported inputs without payment of IGST and Cess⁵

However, basis explanation provided to Rule 96(10) of the CGST Rules, the said benefits will not be considered to be availed if the importer chose to pay IGST and Cess and availed exemption only to the extent of basic customs duty payable on the imports.

Considering the above, it has been clarified that where the importer had availed benefits under the Notifications at the time of import but had subsequently paid IGST and Cess at a later date, along with interest and had got the bill of entry reassessed through jurisdictional customs authorities, then refund of IGST paid on exports will not be considered to be in contravention of Rule 96(10) of CGST Rules and hence, will be allowed.