He said in a circular that past tax assessments from ice cream parlors that attracted GST at the 5% rate with no input tax credit will be treated as fully paid GST to avoid unnecessary litigation.
“Since the decision is only to regularize past practice, no refund of GST will be allowed, if already paid at 18%,” the CBIC said.
He also said that fees charged to prospective students for entry or admission, or for issuance of certificates of eligibility and services associated with transit cargo to and from Nepal and Bhutan, are exempt. of the GST.
Government or local authority fines and penalties imposed for violation of any law, by-law, rule or regulation are also exempt from GST, the CBIC said.
The business of selling advertising space in memorabilia published as books is eligible for a preferential GST rate of 5%, he said.
The circular also clarified that cancellation fees collected by hotels and tour and tour operators will be taxed at the same rate of GST that applies to the main service.
In cases where an employee’s wages are forfeited or an amount is recovered under a bond when the person leaves their employment before the agreed minimum period, they will be exempt from GST.
An electric vehicle, with or without batteries, will be subject to a 5% GST rate, while mangoes, other than fresh mangoes, sliced mangoes and dried mangoes, will be subject to a 12% GST rate. Similarly, pulses used as animal feed by the dairy industry will be subject to a 5% GST.
The proactive step taken by CBIC in releasing the current clarifications is likely to benefit industries across various sectors,” said Saurabh Agarwal, Tax Partner, EY.