The Central Board of Indirect Taxes and Customs (CBIC) has published clarifications on the applicability of GST on specific services in its circular numbered 190/02/2023-GST, which was published on January 13, 2022. This also includes clarification regarding Applicability of GST on accommodation services supplied by Air Force Mess to its personnel. Let’s understand this update through an article.
Air Force Mess receives reference asking for clarity
The Air Force Mess has received a reference asking for clarity on whether or not the Goods and Services Tax (GST) is due on accomodation services provided to the troops of the Air Force.
What are Services under GST?
The term “services” refers to anything other than goods, money, and securities. However, it does cover activities connected to the usage of money or its conversion, in cash or by any other manner, from one form, currency or denomination, to another form for which a separate compensation is charged. According to the law governing the Goods and Services Tax, which is abbreviated as “GST,” the taxpayer is responsible for making tax payments both at the time of supply and at the location of supply. The location of supply is the location of consumption for a service. Under the IGST Act, provisions are clarified about what is known as the “Place of supply.”
Services Exempted under GST in India
According to clause number 6 of notification number 12/2017 – Central Tax (Rate) dated June 28, 2017, the Goods and Services Tax (GST) does not apply to any services that are provided by the Central Government, any state government, the Union Territory, or any local authority to any person who is not a business entity. The exceptions to this rule include services provided by the postal department, transportation of goods and passengers, and other similar services.
GST exempted on accommodation services provided by Air Force
As proposed by the GST Council, it is now clarified that accommodation services given by Air Force Mess and other similar messes, such as Army mess, Navy mess, Paramilitary and Police forces mess to their troops or any person other than a commercial entity are covered by Sl. No. 6 of notice No. 12/2017 – Central Tax (Rate) dated 28.06.2017; this is provided that the services offered by such messes qualify to be treated as services supplied by the Central Government. Thus, the GST for the accommodation services provided by air force mess to its personnel will be taxed at the nil rate.
Source: Circular No. 190/02/2023
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