CBIC issues Circular clarifying applicability of GST on certain services

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 21^st 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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