- Taxability of Tenancy Rights
Recently the Government has clarified the taxability of transfer of tenancy rights under GST vide its circular no 44/18/2018 dated 2nd May, 2018. The issue involved was whether tenancy premium shall attract GST when stamp duty and registration charges are levied on the said premium. The Government has clarified that merely because a transaction or a supply involves execution of documents which may require registration and payment of registration fee and stamp duty, it would not preclude them from the scope of supply of goods and services and from payment of GST and thus it has clarified that consideration for the said activity shall attract levy of GST under para 2 of Schedule II which states that any lease, tenancy, easement, license to occupy land is a supply of service even if stamp duty value and registration charges are paid. It was also clarified that grant of tenancy rights in a residential dwelling for use as residence dwelling against tenancy premium or periodic rent or both is exempt as per notification no. 12/2017-Central Tax Rate.
- No change in the GST law for Agriculturists and other support services
Government vide press release on 28th May 2018 has clarified that certain reports andnewsregarding change in GST law relating to farmerthat they would berequired to take registration and pay GST at the rate 18% if they lease out their land are incorrect and misleading. Further, it was clarified that support services to agriculture are also exempt since the GST is rolled out and it includes services incidental to it like renting or leasing of vacant land with or without structure incidental to it uses and agriculturists are also exempted from taking GST registration.
- Recipient is liable to pay tax under Reverse Charge on purchase of Priority Sector Lending Certificate
The Central Government vide Notification No. 11/2018-Central Tax (Rate) dated 28th May, 2018 has amended the Notification No.4/2017-Central Tax (Rate), dated the 28th June, 2017 by inserting S.no. 7 which has provided that on supply of Priority Sector Lending Certificate by a registered supplier, tax shall be payable under reverse charge mechanism by the recipient of such supply who isregistered under GST. Priority Sector Lending is an important role given by the Reserve Bank of India (RBI) to the banks for providing a specified portion of the bank lending to few specific sectors like agriculture, education, social infrastructure etc. (i.e. 40% of their total loans).Priority Sector Lending Certificates are certificates issued by banks that have overreached their priority sector lending targets given by RBI.Buyers of PSLCs are usually those banks who could not meet their priority sector lending targets.
- E-way Bill updates
- E-way Bill system for intra-state movement of goods are compulsory in every state except Delhi from 3rd June, 2018. However E-eay bill operations are compulsory for inter-state movement of goods in all states.
- The railways shall not deliver the goods unless the E-way Bill is produced at the time of delivery.
- If the goods transit through a second state while moving from one place in a State to another place in the same State, an E-way bill is required to be generated.
- West Bengal government has enhanced intra-state E-way bill threshold to Rs.1,00,000/- w.e.f. June 6, 2018 (without passing through any other state) vide Notification No. 13/2018- CT/GST.