Circular No. 27/01/2018-GST
Government of India
Ministry of Finance
Department of Revenue
Tax research Unit
North Block, New Delhi
04th January 2018
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/ Commissioner of Central Tax (All) / The Principal Director Generals/ Director Generals (All)
Subject: Clarifications regarding levy of GST on accommodation services, betting and gambling in casinos, horse racing, admission to cinema, home stays, printing, legal services etc. – Reg.
Representations were received from trade and industry for clarification on certain issues regarding levy of GST on supply of services.
- In this context, it is stated that the following clarifications, inter-alia, were published as FAQ at http://www.cbec.gov.in/resources//htdocs-cbec/gst/om-clarification.pdf.4
|S. No.||Questions/ Clarifications sought||Clarifications|
|2.||Vide notification No. 11/2017-Central Tax (Rate) dated the 28th June 2017 entry 34, GST on the service of admission into casino under Heading 9996 (Recreational, cultural and sporting services) has been levied @ 28%. Since the Value of supply rule has not specified the method of determining taxable amount in casino, Casino Operators have been informed to collect 28% GST on gross amount collected as admission charge or entry fee. The method of levy adopted needs to be clarified.||Relevant part of entry 34 of the said CGST notification reads as under:
“Heading 9996 (Recreational, cultural and sporting services) – …
(iii) Services by way of admission to entertainment events or access to amusement facilities including exhibition of cinematograph films, theme parks, water parks, joy rides, merry-go rounds, go carting, casinos, race-course, ballet, any sporting event such as Indian Premier League and the like. – 14%
(v) Gambling. – 14 %” As is evident from the notification, “entry to casinos” and “gambling” are two different services, and GST is leviable at 28% on both these services (14% CGST and 14% SGST) on the value determined as per section 15 of the CGST Act. Thus, GST @ 28% would apply on entry to casinos as well as on betting/ gambling services being provided by casinos on the transaction value of betting, i.e. the total bet value, in addition to GST levy on any other services being provided by the casinos (such as services by way of supply of food/ drinks etc. at the casinos). Betting, in pre-GST regime, was subjected to betting tax on full bet value.
|3.||The provision in rate schedule notification No. 11/2017-Central Tax (Rate) dated the 28th June 2017 does not clearly state the tax base to levy GST on horse racing. This may be clarified.||GST would be leviable on the entire bet value i.e. total of face value of any or all bets paid into the totalisator or placed with licensed book makers, as the case may be. Illustration: If entire bet value is Rs. 100, GST leviable will be Rs. 28/-.|
|5.||Whether home stays providing accommodation through an Electronic Commerce Operator, below threshold limit are exempt from taking registration?||Notification No. 17/2017-Central Tax (Rate), has been issued making ECOs liable for payment of GST in case of accommodation services provided in hotels, inns guest houses or other commercial places meant for residential or lodging purposes provided by a person having turnover below Rs. 20 lakhs (Rs. 10 lakhs in special category states) per annum and thus not required to take registration under section 22(1) of CGST Act. Such persons, even though they provide services through ECO, are not required to take registration in view of section 24(ix) of CGST Act, 2017.|
|6.||To clarify whether supply in the situations listed below shall be treated as a supply of goods or supply of service: –
1. The books are printed/ published/ sold on procuring copyright from the author or his legal heir. [e.g. White Tiger Procures copyright from Ruskin Bond]
2. The books are printed/ published/ sold against a specific brand name. [e.g. Manorama Year Book]
3. The books are printed/ published/ sold on paying copyright fees to a foreign publisher for publishing Indian edition (same language) of foreign books. [e.g. Penguin (India) Ltd. pays fees to Routledge (London)] The books are printed/ published/ sold on paying copyright fees to a foreign publisher for publishing Indian language edition (translated). [e.g. Ananda Publishers Ltd. pays fees to Penguin (NY)]
|The supply of books shall be treated as supply of goods as long as the supplier owns the books and has the legal rights to sell those books on his own account.|
|7.||Whether legal services other than representational services provided by an individual advocate or a senior advocate to a business entity are liable for GST under reverse charge mechanism?||Yes. In case of legal services including representational services provided by an advocate including a senior advocate to a business entity, GST is required to be paid by the recipient of the service under reverse charge mechanism, i.e. the business entity.|
- The above clarifications are reiterated for the purpose of levy of GST on supply of services.
- Difficulty if any, in the implementation of the circular should be brought to the notice of the Board. Hindi version would follow.
Rachna Technical Officer