Following the 53rd GST Council meeting on June 22, 2024, the Central Board of Indirect Taxes and Customs (CBIC) issued a series of clarifying circulars, numbered 207 to 222, on June 26, 2024. These circulars address key issues including taxability, place of supply, and time of supply, ensuring compliance and clarity for taxpayers. Here is a comprehensive analysis of the most significant circulars issued.
CBIC’s New Circulars: An Overview
CBIC has introduced 16 circulars (Nos. 207 to 222-GST), formulated from the recommendations of the GST Council meeting on June 22, 2024. These circulars cover a spectrum of critical issues:
Circular No. 207 focuses on reducing government litigation by setting monetary thresholds for departmental appeals before the GST Appellate Tribunal (GSTAT), High Courts, and the Supreme Court. Circular No. 208 provides special procedures for manufacturers of specified commodities. Circular No. 209 clarifies the provisions related to the place of supply under Section 10(1) of the Integrated Goods and Services Tax Act, 2017.
Overview of Key Circulars
| Circular No. | Issue |
|---|---|
| 207 | Reduction of Government Litigation – fixing monetary limits for filing appeals or applications by the Department before GSTAT, High Courts, and Supreme Court |
| 208 | Clarifications on various issues pertaining to special procedure for the manufacturers of specified commodities |
| 209 | Clarification on the provisions of clause (ca) of Section 10(1) of the Integrated Goods and Service Tax Act, 2017 relating to place of supply |
| 210 | Clarification on the valuation of supply of import of services by a related person where the recipient is eligible for full input tax credit |
| 211 | Clarification on the time limit under Section 16(4) of the CGST Act, 2017 in respect of RCM supplies received from unregistered persons |
| 212 | Clarification on the mechanism for providing evidence of compliance with conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 by the suppliers |
| 213 | Seeking clarity on the taxability of reimbursement of securities/shares as SOP/ESPP/RSU provided by a company to its employees |
| 214 | Clarification on the requirement of reversal of input tax credit in respect of the portion of the premium for life insurance policies which is not included in the taxable value |
| 215 | Clarification on the taxability of wreck and salvage values in motor insurance claims |
| 216 | Clarification in respect of GST liability and input tax credit (ITC) availability in cases involving Warranty/ Extended Warranty, in furtherance to Circular No. 195/07/2023-GST dated 17.07.2023 |
| 217 | 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 |
| 218 | Clarification regarding the taxability of the transaction of providing a loan by an overseas affiliate to its Indian affiliate or by a person to a related person |
| 219 | Clarification on the availability of input tax credit on ducts and manholes used in the network of optical fiber cables (OFCs) in terms of section 17(5) of the CGST Act, 2017 |
| 220 | Clarification on the place of supply applicable for custodial services provided by banks to Foreign Portfolio Investors |
| 221 | Time of supply on Annuity Payments under HAM Projects |
| 222 | Time of supply in respect of the supply of the allotment of Spectrum to Telecom companies in cases where an option is given to the Telecom Companies for payment of licence fee and Spectrum usage charges in instalments in addition to an option of upfront payment |
Reduction of Government Litigation in GST (Circular No. 207/1/2024-GST)
The CBIC, under Section 120 of the CGST Act, has established monetary thresholds below which appeals or applications will not be filed by Central Tax officers. This measure aims to minimize unnecessary litigation and optimize judicial resources. The thresholds are:
| Appellate Forum | Monetary Limit (₹) |
|---|---|
| GSTAT | 20,00,000 |
| High Court | 1,00,00,000 |
| Supreme Court | 2,00,00,000 |
Only the aggregate amount of tax in dispute is considered, excluding interest and penalties. These limits apply to CGST, SGST, UGST, IGST, and Compensation Cess disputes. In cases of interest, penalty, late fee, or erroneous refunds, the respective amounts are considered for the monetary limit.
The thresholds are non-applicable in certain circumstances, including cases involving constitutional validity, valuation of goods or services, classification disputes, refunds, place of supply issues, and recurring interpretational matters. Additionally, cases with adverse comments or costs imposed on the government or its officers are excluded.
Special Procedure for Manufacturers of Specified Commodities (Circular No. 208/2/2024-GST)
Based on the GST Council’s recommendations, the CBIC has clarified various issues pertaining to the special procedure for manufacturers of specified commodities such as pan masala, tobacco, and hookah. Key points include:
The make and model number of machinery are optional in Table 6 of FORM GST SRM-I.
The special procedure is not applicable to manufacturing units in Special Economic Zones (SEZs).
Chartered Engineers with certification from the Institute of Engineers India (IEI) are qualified to issue certificates.
The special procedure applies to all individuals involved in manufacturing, including job workers and contract manufacturers. If unregistered, the principal manufacturer bears the compliance responsibility.
Place of Supply of Goods to Unregistered Persons (Circular No. 209/3/2024-GST)
The CBIC has provided clarity on the place of supply for goods delivered to unregistered persons, especially when supplied through e-commerce platforms. According to clause (ca) of Section 10(1) of the IGST Act, effective from October 1, 2023:
When goods are supplied to an unregistered person, and the delivery address differs from the billing address, the place of supply is the delivery address recorded on the invoice.
Suppliers may record the delivery address as the recipient’s address on the invoice for determining the place of supply.
These insights from Circulars No. 207, 208, and 209 underscore the CBIC’s commitment to simplifying GST compliance, reducing litigation, and providing clarity on critical tax issues. By setting clear guidelines and thresholds, the CBIC aims to streamline the tax administration process and ensure a more efficient dispute resolution system.
Key Takeaways from the Latest CBIC Circulars
The CBIC’s recent circulars provide a roadmap for taxpayers and tax officials alike, clarifying procedures and reducing ambiguities in GST implementation. With these updates, the GST regime continues to evolve, aiming for greater transparency and efficiency in tax administration.
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