CBIC issues Circular clarifying applicability of GST on certain services
CBIC has issued Circular No. 245/02/2025-GST dated 28.01.2025 giving clarifications regarding applicability of GST on certain services.
Based on the recommendations of the GST Council in its 55th meeting held on 21st December 2024, clarifications on various issues are being issued through this Circular, as under:
Applicability of GST on penal charges being levied by the Regulated Entities (REs)in view of RBI instructions dated 18.08.2023 directing such Regulated Entities (REs) to levy penal charges in place of penal interest
It has been clarified that no GST is payable on the penal charges levied by Regulated Entities, in compliance with RBI directions dated 18.08.2023, for non-compliance with material terms and conditions of loan contract by the borrower.
Whether GST exemption under Sl. No. 34 of notification No. 12/2017-CTR dated 28.06.2017 is available to payment aggregators in relation to settlement of an amount, up to two thousand rupees in a single transaction, transacted through credit card, debit card, charge card or other payment card services?
It has been clarified that GST exemption under Sl. No. 34 of notification No. 12/2017-CTR dated 28.06.2017 is available to RBI regulated Payment Aggregators (PAs) in relation to settlement of an amount, up to two thousand rupees in a single transaction, transacted through credit card, debit card, charge card or other payment cardservices, as PAs fall within the definition of ‘acquiring bank’ given in the Explanation to the said exemption entry. It is also clarified that this exemption is limited to payment settlement function only, which involves handling of money, and does not cover Payment Gateway (PG) services.
Regularizing payment of GST on research and development services provided by Government Entities against consideration in the form of grants received from Government Entities.
As recommended by the 55th GST Council, the payment of GST on the supply of research and development services by Government Entities against grants received from the Government Entities is regularized for the period 01.07.2017 to 09.10.2024, on ‘as is where is basis.
Regularizing payment of GST on skilling services provided by Training Partners approved by the National Skill Development Corporation.
The payment of GST on services provided by Training Partners approved by the National Skill Development Corporation, which were exempt prior to 10.10.2024, is regularized for the period 10.10.2024 to 15.01.2025, on ‘as is where is’ basis.
Applicability of GST on facility management services provided to Municipal Corporation of Delhi (MCD) Headquarters
It is clarified that GST is applicable on the services provided by facility management agency to MCD, Delhi HQ for upkeep of its head quarter building at applicable rates as these services are not covered under the scope of entry at Sr. No. 3A of the notification No. 12/2017-CTR dated 28.06.2017.
Whether Delhi Development Authority (DDA) is a local authority as per section 2(69) of the CGST Act, 2017
As recommended by the 55th GST Council, it is hereby clarified that DDA cannot be treated as local authority under GST law.
Regularizing payment of GST on Reverse Charge (RCM) basis on renting of commercial property by unregistered person to a registered person for taxpayers registered under composition levy.
Payment of GST on Reverse Charge (RCM) basis on renting of immovable property other than residential dwelling (commercial property) by unregistered person to registered person under composition levy is hereby regularized for the period from 10.10.2024 to 15.01.2025 on ‘as is where is’ basis.
Regularizing payment of GST on certain support services provided by an electricity transmission or distribution utility
Payment of GST on certain incidental or ancillary services to the supply of transmission or distribution of electricity, as mentioned in Para 9.1 above, supplied by an electricity transmission or distribution utility is regularized for the period 10.10.2024 to 15.01.2025, on ‘as is where is’ basis.
Regularizing the payment of GST on services provided by M/s Goethe Institute/Max Mueller Bhawans
Payment of GST on services supplied by Goethe Institute/Max Mueller Bhawans is hereby regularized for the period from 01.07.2017 to 31.03.2023 on ‘as is where is’ basis.
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