CBIC has issued various Circulars on 26th June. 2024 to give effect to the recommendations made in 53rd GST Council Meeting held on 22nd June, 2024. These Clarifications aims to provide clarity to trade and tax officers and to reduce litigations.
These Circulars are summarized as under:
A. Circular 207/1/2024-GST – Fixing monetary limits for filing appeals or applications by the Department before GSTAT, High Courts and Supreme Court
This Circular aims to streamline the appeal process, reduce litigation, and ensure that decisions are made based on the merits of each case while adhering to specified monetary limits.
The following monetary limits has been fixed below which appeal or application or Special Leave Petition, as the case may be, shall not be filed by the Central Tax officers before Goods and Service Tax Appellate Tribunal (GSTAT), High Court and Supreme Court under the provisions of CGST Act
| Appellate Level | Monetary Limit |
| GST Tribunal | Rs. 20 Lakhs |
| High Court | Rs. 1 Crore |
| Supreme Court | Rs. 2 Crore |
Also, the Circular outlines principles and exclusions for determining whether a case meets the monetary limits for filing an appeal under GST law:
Principles for Determining Monetary Limits
- Dispute on Tax Demand: Only the aggregate amount of tax in dispute is considered
- Dispute on Interest: Only the amount of interest in dispute is considered.
- Dispute on Penalty: Only the amount of penalty in dispute is considered.
- Dispute on Late Fee: Only the amount of late fee in dispute is considered.
- Dispute on Interest, Penalty, and/or Late Fee: The aggregate amount of interest, penalty, and late fee is considered.
- Dispute on Erroneous Refund: The amount of refund in dispute is considered.
- Monetary Limit Application: Applies to the disputed amount of tax, interest, penalty, or late fee.
- Composite Orders: The monetary limit is based on the total amount involved in all appeals or demand notices within the composite order.
Exclusions: Monetary limits do not apply in the following circumstances:
- Ultra Vires Provisions: When a provision of GST Acts or related rules/regulations has been held unconstitutional.
- Ultra Vires Orders/Notifications: When orders, notifications, instructions, or circulars are held unconstitutional.
- Specific Matters:
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- Valuation of goods or services
- Classification of goods or services
- Refunds
- Place of supply
- Recurring issues involving interpretation of laws/rules/notifications
4. Strictures/Adverse Comments: When adverse comments or costs have been imposed against the government or its officers.
5. Board's Discretion: Any other case deemed necessary by the Board in the interest of justice or revenue.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-207-01-2024.pdf
B. Circular No. 208/02/2024-GST: Various issues pertaining to special procedure for the manufacturers of the specified commodities i.e. Pan-Masala, Tobacco and similar items
Earlier, Vide Notification No. 04/2024-Central Tax dated 05.01.2024, the CBIC has notified the special procedure to be followed by a registered person engaged in manufacturing of the goods. The procedure prescribes the Details of Packing Machines, Special Monthly Statement, Certificate of Chartered Engineer, Details of the machines, Details of the intimation of the machines furnished to other departments, Disposal of the packing machines, Product details, Details of the Documents uploaded.
Vide this Circular, clarifications has been issued regarding compliance with the special procedure for manufacturing units under GST, as per Notification No. 04/2024-CT dated 05.01.2024. These are summarized as under:
Issue 1: Non-availability of Make, Model Number, and Machine Number
Optional Fields for Make and Model: In Table 6 of FORM GST SRM-I, make and model number are optional. If the make is unavailable, the year of purchase can be declared as the make number.
Mandatory Machine Number: The machine number is mandatory. If unavailable, the manufacturer can assign a numeric number and provide details in Table 6
Issue 2: Electricity Consumption Rating
Declaration Based on Available Data: Declare the electricity consumption rating based on available specifications or documents in Table 6 of FORM GST SRM-I.
Certification by Chartered Engineer: If not available, get it calculated and certified by a Chartered Engineer in FORM GST SRM-III. Upload this certificate with FORM GST SRM-I and provide details in Table 10.
Issue 3: Reporting Value in Column 8 of Table 9 (FORM GST SRM-II)
Goods with No MRP: For goods without MRP, enter the sale price of the goods in Column 8 of Table 9.
Issue 4: Qualifications of Chartered Engineer
Eligibility: A Practicing Chartered Engineer with a certificate of practice from the Institute of Engineers India (IEI) is qualified to provide the required certificate.
Issue 5: Applicability of Special Procedure
SEZ units: Not Applicable to SEZ Units
Manual Seamer/Sealer: The procedure is not applicable to manual seamer/sealer operations or manual packing, such as post-harvest tobacco leaf packing.
Machine to be Declared: Declare the machine used for final packing in Table 6.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-208-02-2024.pdf
C. Circular No. 209/03/2024-GST: Clarification regarding Place of Supply(Pos) Relating to place of supply of goods to unregistered persons:
Earlier, vide Notification 02/2023-Integrated Tax dated 29.09.2023, amendment made effective in Section 10(1) of IGST Act, by inserting new clause (ca), relating to place of supply of goods, where supply made to person other than a registered person.
Vide this Circular, clarification has been issued to address and resolve the ambiguity regarding the place of supply in cases where the billing and delivery addresses of goods supplied to unregistered persons differ, particularly in e-commerce transactions.
Clarification:- When goods are supplied to an unregistered person and the billing address differs from the delivery address, the place of supply is the location as per the delivery address recorded in the invoice. Also, Suppliers should record the delivery address as the recipient's address on the invoice when the billing and delivery addresses differ.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-209-03-2024.pdf
D. Circular No. 210/04/2024-GST: Valuation of supply of import of services by a related person where recipient is eligible to full input tax credit
Clarification:
- A foreign affiliate provides services to a related domestic entity in India.
- If full ITC is available to the domestic entity, the value declared in the invoice is deemed to be the open market value
- If no invoice is issued, the value is deemed Nil, and this Nil value is considered the open market value.
This valuation method aligns with the treatment of domestic supplies between related or distinct persons under Rule 28 and the Circular No. 199/11/2023-GST.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-210-04-2024.pdf
E. Circular No. 211/05/2024-GST: Time Limit u/s 16(4) of CGST Act, 2017 in respect of RCM supplies received from unregistered persons
This clarification aims to resolve industry concerns and provide clear guidance on the time limits for availing ITC in cases of RCM supplies from unregistered suppliers. Timely issuance of the invoice and payment of tax is crucial to avoid interest and penal consequences.
Clarification:-
- For supplies received from unregistered suppliers where tax is paid on Reverse Charge Mechanism, the relevant financial year for section 16(4) is the financial year in which the recipient issues the invoice.
- The recipient must fulfill all conditions and restrictions under sections 16 and 17 of the CGST Act.
- Delayed issuance of the invoice will result in interest on delayed tax payment and may attract penal action under section 122 of the CGST Act.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-211-05-2024.pdf
F. Circular No. 212/06/2024-GST: Mechanism for providing evidence of compliance of conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 by the suppliers
Clarification verifying the reversal of Input Tax Credit (ITC) by recipients when discounts are offered by suppliers through credit notes after the supply has been effected.
Currently, there is no facility on the common portal to verify whether the ITC attributable to the discount has been reversed by the recipient.
Clarification: Verification Mechanism via Physical certificates
- Suppliers can procure a certificate from the recipient, issued by a Chartered Accountant (CA) or Cost Accountant (CMA), certifying the required ITC reversal.
- CA/CMA Certificate must include details of credit notes, relevant invoice numbers, amount of ITC reversal, and the relevant document through which the ITC reversal has been made.
- If the tax amount involved in the discount does not exceed ₹5,00,000 in a Financial Year, the supplier can procure an undertaking/certificate from the recipient instead of a CA/CMA certificate.
- Such certificates or undertakings are considered suitable and admissible evidence for the purpose of section 15(3)(b)(ii) of the CGST Act.
- Suppliers should produce these certificates/undertakings during proceedings such as scrutiny, audit, investigations, etc
- Even for past periods, these certificates can be produced as evidence of ITC reversal.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-212-06-2024.pdf
G. Circular No. 213/07/2024-GST: Taxability of re-imbursement of securities/shares as SOP/ESPP/RSU provided by a company to its employees.
This Circular addresses the taxability especially in cases where Indian subsidiary companies offer the option for allotment of securities/shares of their foreign holding companies.
Clarifications:
- Non-Taxability of Securities Transfer: Transfer of shares/securities is not subject to GST as they are neither goods nor services.
- Compensation Plans: ESOPs, ESPPs, and RSUs provided as part of employee compensation are not subject to GST.
- Reimbursement of Costs: Reimbursement of the cost of shares/securities by the domestic subsidiary company to the foreign holding company on a cost-to-cost basis is not subject to GST.
- Additional Charges: Any additional charges over the cost of securities by the foreign holding company are subject to GST on a reverse charge basis by the domestic subsidiary company.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-213-07-2024.pdf
H. Circular No. 214/08/2024-GST: Clarification on treatment of input tax credit (ITC) in relation to the premium for life insurance policies which is not included in taxable value
This Circular addresses whether the amount of insurance premium not included in taxable value under Rule 32(4) of the CGST Rules should be considered an exempt supply/non-taxable supply. Further If considered exempt/non-taxable, there would be a need for reversal of ITC as per section 17(1) of the CGST Act read with Rule 42 & 43 of the CGST Rules.
Clarification: No Requirement for ITC Reversal
Life insurance services are taxable; however, the premium component allocated for investment is not included in the taxable value as per Rule 32(4). The premium portion not included in the taxable value is neither nil rated, wholly exempt, nor non-taxable, as the service itself is taxable.
The amount of the premium for taxable life insurance policies, which is not included in the taxable value as per Rule 32(4) of the CGST Rules, should not be treated as pertaining to an exempt or non-taxable supply.
Consequently, there is no requirement for reversal of input tax credit in respect of this amount under Rule 42 or Rule 43 of the CGST Rules.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-214-08-2024.pdf
I. Circular No.-215/9/2024-GST: Taxability of wreck and salvage values in motor insurance claims.
Insurance companies provide services of insuring vehicles for damages, charging premiums from the vehicle owners. It is the responsibility of the insurance company to either get the vehicle repaired or compensate the insured person, as per the terms of the insurance contract.
Clarification:
No GST Liability for Insurance Companies: If the insurance company deducts the salvage value from the claim amount, the salvage remains with the insured (due to deduction in claim settlement). In such cases, there is no supply of salvage by the insurance company, and hence, no GST liability on the insurance company for the salvage value.
GST Liability for Insurance Companies: If the insurance company settles the claim for the full IDV (Insured’s Declared Value) without deducting the salvage value, the salvage becomes the property of the insurance company. In such cases, the insurance company is liable to discharge GST on the disposal or sale of the salvage.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-215-09-2024.pdf
J. Circular No. 216/10/2024-GST: GST liability and ITC availability for warranty replacement of parts and repair services during the warranty period
Clarification:
- Replacement of Goods: Earlier, Circular was issued to address GST liability and ITC reversal only for replacement of parts, not for entire goods. Now, it is clarified that such clarifications extend to entire goods replaced under warranty. Where the term ‘parts’ is used in the initial circular, it should be read as ‘goods or parts.
- Replacement by Distributors from Own Stock: No GST or ITC reversal required when distributors replace parts/goods from their stock and get replenished by the manufacturer.
- Nature of Supply for Extended Warranty:
For Agreement at the Time of Original Supply: If the supplier of goods and extended warranty are different, the extended warranty is a separate supply of services.
For Agreement After Original Supply: The extended warranty is always treated as a supply of services.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-216-10-2024.pdf
K. Circular No. 217/11/2024-GST: Entitlement of ITC by the insurance companies on the expenses incurred for repair of motor vehicles in case of reimbursement mode of insurance claim settlement.
Insurance companies provide general insurance services, including motor vehicle insurance, and settle claims either through a Cashless or Reimbursement mode.
Clarification:
- ITC on Repair Expenses in Reimbursement Mode: Insurance companies are considered recipients of repair services, even if the initial payment is made by the insured and reimbursed by the insurer.
ITC is available to insurance companies for repair expenses incurred under reimbursement mode, as the insurance company is ultimately liable for the repair costs.
- ITC Availability When Repair Invoice Includes Excess Amounts beyond approved claim cost:
Separate Invoice: If two separate invoices are issued (one for the approved claim cost to the insurance company and one for the excess amount to the customer), ITC is available to the insurance company on the invoice issued to it, subject to reimbursement of the said amount to the customer.
Single Invoice: If a single invoice is issued for the full repair amount to the insurance company, ITC is available only to the extent of the approved claim cost reimbursed to the insured.
- ITC Availability When Invoice for vehicle repair is Not in the Name of the Insurance Company: ITC is not available to the insurance company if the repair invoice is not in its name, as the conditions of Section 16(2) are not satisfied.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-217-11-2024.pdf
L. Circular No. 218/12/2024-GST: Taxability of the transaction of providing loan by an overseas affiliate to its Indian affiliate or by a person to a related person
- Taxability of Loans Between Related Entities: Providing loans between related entities or by overseas affiliates to Indian entities, with consideration only by way of interest or discount, is considered a supply but is exempt from GST.
- Processing and Administrative Fees related to loan services: Generally, a one-time fee is charged, such fees if charged are taxable under GST as they represent taxable consideration for the service of facilitating the loan.
However, Absence of such fees in related party transactions implies no additional taxable supply apart from the interest or discount. Hence, there is no GST on such transactions by resorting to open market value for valuation as per Rule 28 of CGST Rules.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-218-12-2024.pdf
M. Circular No. 219/13/2024-GST: Availability of ITC for Ducts and Manholes Used in Optical Fiber Cable (OFC) Networks
- Ducts and manholes are part of the “plant and machinery” as they are used in the OFC network for making outward supply of telecommunication signals.
- They are not specifically excluded from the definition of “plant and machinery” as they are not land, building, civil structures, telecommunication towers, or pipelines laid outside factory premises.
- ITC Availability: ITC is not restricted for ducts and manholes used in the OFC network under Section 17(5)(c) or (d) of the CGST Act. This applies because they are integral to the OFC network used for telecommunication services and are not excluded items under the plant and machinery definition.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-219-13-2024.pdf
N. Circular No. 220/14/2024-GST: Place of supply applicable for custodial services provided by banks to Foreign Portfolio Investors
Custodial Services Definition and Scope: Include safekeeping of securities of clients and incidental services.
Account Holder Clarification: Custodial services are not considered services provided to account holders as per Section 13(8)(a) of the IGST Act.
The place of supply for services supplied by a banking company or financial institution to account holders is the location of the supplier.
Place of Supply Determination: Custodial services are not covered under Section 13(8)(a) of the IGST Act as they do not qualify as services provided to ‘account holders'.
Place of supply for custodial services is determined under the default provision, Section 13(2), implying the location of the recipient of services.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-220-14-2024.pdf
O. Circular No. 221/15/2024-GST: Time of supply on Annuity Payments under Hybrid Annuity Mode (HAM) Projects
Under Hybrid Annuity Mode, a portion of the Bid Project Cost is received during the construction period, and the remaining payment is received as deferred payments (annuity) spread over several years.
HAM Contracts: Considered as continuous supply of services under Section 2(33) of the CGST Act. Payments are made periodically, either on specified dates or upon the completion of specific events as per the contract.
The HAM contract should be considered holistically as a single contract for both construction and O&M services. It cannot be artificially split based on payment terms.
Time of Supply:
- If the invoice is issued on time: the date of issuance of the invoice or date of receipt of payment, whichever is earlier.
- If the invoice is not issued on time: the date of provision of service (due date of payment) or date of receipt of payment, whichever is earlier.
Inclusion of Interest Component
The installments/annuity paid by NHAI to the concessionaire may include an interest component. As per Section 15(2)(d) of the CGST Act, this interest component should be included in the taxable value for the purpose of tax payment.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-221-15-2024.pdf
P. Circular No. 222/16/2024-GST: Time of Supply for Spectrum Allocation Services
GST is payable on these spectrum allocation services under reverse charge mechanism as per Notification No. 13/2017-Central Tax (Rate) dated 28th June, 2017.
Time of Supply under Deferred Payment Options
Upfront Payments: GST is payable when the upfront payment is made or due, whichever is earlier.
Deferred Payments: GST is payable on deferred payments as and when they are due or made, whichever is earlier.
To access the Complete Circular https://taxo.online/wp-content/uploads/2024/06/Circular-No-222-16-2024.pdf
