GSTN Advisory on Integrated Services from NIC-IRP e-invoice-1 and e-invoice-2 Portals      CGST Circular - Dated 15th July, 2024  
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Recent Updates

GSTN Advisory on Integrated Services from NIC-IRP e-invoice-1 and e-invoice-2 Portals


  The integrated services from NIC's e-invoice-1 and e-invoice-2 portals will be available on sandbox on 18th July 2024 and production on 1st August 2024.Both the portals (NIC-IRP 1 & 2) provide the web and API modes for e-invoice related services. Printing, downloading, and cancelling e-invoices can be done on either portal. Additional e-invoice portals (IRP-3/IRP-4/IRP-5/IRP-6) are also available for similar services.

CGST Circular - Dated 15th July, 2024


  This Circular provide clarifications regarding the applicability of GST on certain services. Exemptions for certain services (e.g., platform tickets, retiring rooms) and Exemption provided for accommodation services under Rs. 20,000 per person per month for a continuous period of 90 days. Transactions between Special Purpose Vehicles (SPVs) and the Ministry of Railways are exempted from GST.

  The GST Council, in its 53rd meeting on June 22, 2024, clarified GST rates and classifications for various goods, including dual-source solar cookers (12%), fire water sprinklers (12%), and parts of poultry-keeping machinery (12%). Additionally, packages over 25 kg or liters of agricultural produce are exempt from the 5% GST levy.

GSTN Advisory on Refund of Additional IGST Due to Post-Export Price Increases


  GST Council has approved the processing of refund applications for additional IGST paid due to price increases after exports.

  Notification No. 12/2024-Central Tax has been issued, and a refund category is being developed in FORM GST RFD-01.

  Required documents are detailed in Paragraph 6 of Circular 226/20/2024-GST.

  Any issues with filing the refund application should be reported on the GST Portal: ""

CGST (RATE) Notification - Dated 12th July, 2024


  These amendments to Notification No. 1/2017-Central Tax (Rate) based on GST Council recommendations. These include changes in tax rates and classifications for various goods such as corrugated and non-corrugated paper products, milk cans, solar cookers. The amendments come into effect on July 15, 2024.

  The Central Government has amended Notification No. 2/2017-Central Tax (Rate) under the CGST Act, 2017, to clarify that agricultural farm produce packaged in quantities over 25 kilograms or 25 liters will not be considered "pre-packaged and labelled" under the Legal Metrology Act, 2009. This change is effective from July 15, 2024.

  The Central Government has amended Notification No. 12/2017-Central Tax (Rate) under the CGST Act, 2017, effective July 15, 2024. The amendments include the addition of new serial numbers (9E, 9F, 9G) to the Table and the insertion of a new entry (12A) providing exemption for accommodation services

IGST (RATE) Notification - Dated 12th July, 2024


  The Central Government, following the recommendations of the GST Council, has amended Notification No. 1/2017-Integrated Tax (Rate) dated 28-06 2017.This notification introduce new entries are 121A, 180A, 183A in Schedule II (12% GST Rate) and modify existing ones in Schedule III (18% rate) of the IGST Act. These amendments, effective from 15th July 2024

  Notification No. 2/2017-Integrated Tax (Rate) has clarifies that agricultural farm produce packages exceeding 25 kg or 25 liters are not considered "pre-packaged and labelled" under the Legal Metrology Act, 2009. This Notification Effective from 15th July 2024.

  GST Council, has issued amendments to Notification No. 9/2017-Integrated Tax (Rate), Effective from 15th July 2024. The amendments include the addition of new serial numbers (10I,10J, 10K). The new entry (13A) providing exemption for accommodation services.

CGST Circular - Dated 11th July, 2024


  The Central Government has introduced an electronic filing system for the Canteen Stores Department (CSD) to claim refunds of 50% of applicable taxes on inward supplies of goods, which will be processed online. The procedure includes submitting FORM GST RFD-10A and ensuring all invoices are validated. Previous manual processes continue for applications filed before the electronic functionality was available.

  The guidelines provide a mechanism for exporters to claim refunds of additional IGST paid due to upward price revisions of goods after export. Exporters can apply using FORM GST RFD-01 with necessary documentation. Refunds will be processed by jurisdictional GST officers, and the system ensures compliance and consistency in handling these claims.

  The guidelines clarify the taxability and valuation of corporate guarantee services provided between related persons under amended Rule 28(2) of the CGST Rules, addressing industry concerns and ensuring consistent application of GST provisions as recommended by the GST Council

  Guidelines address recovery of dues when first appeals are confirmed and Appellate Tribunal is non-operational, allowing taxpayers to pay pre-deposits to stay recovery. Taxpayers can pay the pre-deposit amount via the Electronic Liability Register to stay recovery proceedings.

  The amendment to Circular no. 1/1/2017-CT (dated 26.06.2017) is necessitated by the transition of GST back office operations from ACES-GST to GSTN BO. Circular no. 1/1/2017-CT will be replaced with a new table reflecting these changes.

CGST Notification - Dated 10th July, 2024


  The CBIC's notification on the Central Goods and Services Tax (Amendment) Rules, 2024, introduces several changes based on GST Council recommendations. These include the introduction of Form GSTR-1A and Rule 89 explained new procedure for refunding additional IGST paid due to the upward price revision of exported goods. Amendment in Rule 39 to provide mechanism for distribution of credit by Input Service Distributor. New Rule 95B for refund of tax paid on inward supplies of goods received by Canteen Stores Department.

  The notification seeks to rescind Notification No. 27/2022-Central Tax dated December 26, 2022. This rescission is effective from the date of publication in the Official Gazette

  The Commissioner, using powers from Section 44 of the CGST Act, 2017, and based on GST Council recommendations, exempts registered persons with a turnover up to two crore rupees in the financial year 2023-24 from filing an annual return.

  The Central Government, following GST Council recommendations, has amended Notification No. 52/2018-Central Tax dated September 20, 2018. The amendment changes the tax rate from "half per cent." to "0.25 per cent." in the specified notification.

IGST Notification - Dated 10th July 2024


  Central Goods and Services Tax Act, 2017, has amended Notification No. 02/2018-Integrated Tax dated September 20, 2018. The amendment replaces the tax rate from "one per cent." to "half per cent."

GSTN Increases Document Upload Limit for Business Registrations and Amendments


  The GSTN has announced an increase in the maximum upload size for documents related to the Principal Place of Business and Additional Places of Business during New Registration and Amendments. Taxpayers can now upload documents up to 500 KB.

GSTN Advisory on Address-Related Fields in GST Registration Functionalities


Enhancements have been made to address-related fields in New Registration, Amendment Application (Core & Non-Core), and Geocoding Business Addresses based on ticket analysis and user feedback.

For Indian Addresses:

  PIN Code, State, District, and City/Town/Village must be selected from autosuggestions.

  Other fields allow alphanumeric values and limited special characters but not at the beginning.

For Addresses Outside India

  Zip Code, State, District: All values allowed except {}

  Other fields follow similar rules as Indian addresses

Hover-over icons provide input value instructions for each field. Existing data remains unaffected, but amendments will be validated under new rules. Changes made based on tickets where users were unaware of character limitations.

These changes are applicable to Normal Taxpayers – Regular, SEZ Unit, SEZ Developer, Composition, Input Service Distributor, and Casual Taxpayers.

Locality/Sub-locality Field is not mandatory. If left blank or mismatched with PIN Code, a warning message will appear. Users can proceed by confirming with "YES".

CGST Circular - Dated 26th June, 2024


  Reduction of Government Litigation – fixing monetary limits for filing appeals or applications by the Department before GSTAT, High Courts and Supreme Court

  Clarifications on various issues pertaining to special procedure for the manufacturers of the specified commodities

  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

  Clarification on valuation of supply of import of services by a related person where recipient is eligible to full input tax credit.

  Clarification on time limit under Section 16(4) of CGST Act, 2017 in respect of RCM supplies received from unregistered persons.

  Clarification on mechanism for providing evidence of compliance of conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 by the suppliers

  Seeking clarity on taxability of re-imbursement of securities/shares as SOP/ESPP/RSU provided by a company to its employees.

  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 taxable value

  Clarification on taxability of wreck and salvage values in motor insurance claims.

  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

  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.

  Clarification regarding taxability of the transaction of providing loan by an overseas affiliate to its Indian affiliate or by a person to a related person.

  Clarification on availability of input tax credit on ducts and manholes used in network of optical fiber cables (OFCs) in terms of section 17(5) of the CGST Act, 2017

  Clarification on place of supply applicable for custodial services provided by banks to Foreign Portfolio Investors

  Time of supply on Annuity Payments under HAM Projects

  Time of supply in respect of supply of 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.

53rd GST Council Meeting - June 22, 2024


  The 53rd GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman in New Delhi, saw participation from key central and state financial officials and ministers.

GSTN Advisory on GST SRM-I and GST SRM-II for Taxpayers in Pan Masala and Tobacco Manufacturing


Notification No. 04/2024 – Central Tax dated 05-01-2024 mandates taxpayers dealing in specific goods to provide detailed information. Two forms, GST SRM-I and GST SRM-II, have been introduced:

  GST SRM-I: This form pertains to the registration and disposal of machines. It became available on the portal from 15-05-2024, and taxpayers are already using it to register machines and provide related information.

  GST SRM-II: This form requires taxpayers, specifically those involved in the manufacture of Pan Masala and Tobacco products, to report monthly details of inputs and outputs. It is now available on the portal for use

CGST Notification - Reassignment of Kotputli-Behror District to CGST Alwar Commissionerate


  Vide this notification the district of Kotputli-Behrorhas been assigned to CGST Alwar Commissionerate

Guidelines for initiation of recovery proceedings before three months from the date of service of demand order


  The CBIC has issued guidelines for early recovery of demand orders, allowing initiation before the standard 3-month period if necessary for revenue protection. The process requires the Deputy/Assistant Commissioner to justify the need to the Principal Commissioner/Commissioner, who must document the reasons and issue directives based on credible evidence. Consideration of the taxpayer's financial and operational status is essential, and early payment requests should be made judiciously. Non-compliance will lead to recovery under section 79(1) of the CGST Act, 2017.

CGST Notification - Amendments to Notification No. 02/2017-CT Effective from August 5, 2023


  This is an amendment to Notification No. 02/2017-Central Tax, dated 19th June 2017 redefining the territorial jurisdiction of Alwar, Jaipur and Udaipur in the state of Rajasthan. This is effective from 05/08/2023.

GSTN Advisory on launch of E-Way Bill 2 Portal


The GST Network (GSTN) has announced the release of the E-Way Bill 2 Portal by the National Informatics Centre (NIC) on June 1, 2024. This new portal ( will operate alongside the main E-Way Bill portal ( and will ensure high availability and quick synchronization of e-way bill details between both portals.

Key highlights include:

  Users can generate and update e-way bills independently on the new portal.

  The portal supports both web and API modes for e-way bill operations.

  Existing login credentials for the main portal can be used on the new portal.

  Criss-cross operations allow Part-B of e-way bills to be updated on either portal.

  If the main portal is down, users can update Part-B on the new portal and use both slips.

CBIC Migration to GSTN Back Office and Impact on State Tax Administrations


  The GSTN has announced that from June 1, 2024, the CBIC will move to the GSTN Back Office

  During the migration process, new GST registration applications are either marked for "deemed approval" or assigned to counterpart State tax administrations.

  Consequently all new registration applications from May 25, 2024, to May 31, 2024, will be assigned to concerned States and these taxpayers will remain assigned to the states in the future also

  States should therefore make preparations, if needed, to handle the additional workload.

SOP guidance for the new GST registration certificate


  This circular outlines a Standard Operating Procedure (SOP) under the TNGST Act, 2017, to verify the existence of newly registered taxpayers and prevent fraudulent registrations.

  The new SOP reintroduces RPAD for sending a 'Welcome letter' to new taxpayers, marking a goodwill gesture and verification method.

  Joint Commissioners oversee the dispatch and tracking of these letters. If undelivered, the Registering authority must issue a Show Cause Notice (SCN) and conduct a physical verification.

  The procedure includes a workflow and monitoring system to ensure effective implementation and prevent misuse of the GST system by non-existent taxpayers.

GSTN Advisory on GST Forms for Machine Registration and Monthly Reporting


  The government issued Notification No. 04/2024 – Central Tax on January 5, 2024, seeking information from taxpayers dealing in specified goods.

  The notification introduced two forms: GST SRM-I and GST SRM-II. GST SRM-I is for the registration and disposal of machines, while GST SRM-II collects data on monthly inputs and outputs.

  The GST Portal now supports filing GST SRM-I for machine registration. The facility for GST SRM-II will be available soon.

Nirmala Sitharaman Administers Oath to First President of GST Appellate Tribunal


  Time limit for filing of appeal before GST Appellate Tribunal (GSTAT) against first Appellate Authority's order is within 3 months from the date of receipt of Appellate Order

  Since the GSTAT is not functional, the CGST (9th Removal of Difficulties) Order, 2019, dated 3 December 2019 clarified that the start of the 3 months period shall be (a) the date of communication of the order, or (b) the date on which the President or the State President, as the case may be, of the Appellate Tribunal after its constitution under Section 109, enters office, whichever is later

  GSTAT (Appointment and Conditions of Service of President and Members) Rules, 2023, notified on 25 October 2023.

  Justice (Retd.) Sanjaya Kumar Mishra, former Chief Justice, High Court of Jharkhand, appointed as the President of GSTAT for 4 years and he assumed charge on 06 May 2024.

  Hence the 3-month period for filing appeals started on 6 May 2024 though the modalities and infrastructure for filing of appeals to GSTAT are still not operationalized.

GSTN Advisory on Enhancement in the GST Portal, Dated April 26, 2024


  GSTN announces the launch of an enhanced version of the GST portal on 3rd May 2024.

  News and Updates Section-
i. Beta search functionality, module-wise drop-downs, and access to archived advisories dating back to 2017.
ii. Introduced tab for news and updates.

  Changes to go live at midnight on 3rd May 2024.

CGST Notification - Extension of Deadline for Furnishing GSTR-1 for March 2024- Effective from April 11, 2024


  The newly introduced proviso extends the time limit for furnishing details of outward supplies in FORM GSTR-1 for registered persons required to furnish returns under sub-section (1) of section 39 of the CGST Act for the tax period of March 2024. The extension moves the deadline to April 12, 2024.

GSTN Advisory on Extension of GSTR-1 due date to 12th April 2024


  GSTN has noticed that taxpayers are facing difficulties in filing GSTR-1 intermittently since yesterday due to technical issues leading to slow response on the portal. GSTN has accordingly recommended to CBIC that the due date for filing of GSTR-1 for the monthly taxpayers be extended by a day ie till 12/04/2024.

CGST Notification - Dated 10th April 2024


  The specific change involves substituting the date "1st day of April, 2024" with "15th day of May, 2024" in paragraph 4 of the notification No. 04/2024-Central Tax . The amendment comes into force from the 1st day of April, 2024.

GSTN Advisory on Auto-populate the HSN-wise summary from e-Invoices into Table 12 of GSTR-1


  GSTN announces a new feature on the GST portal: auto-population of HSN-wise summary from e-Invoices into Table 12 of GSTR-1.

  The feature aims to simplify the process by directly drafting HSN data from e-Invoices into Table 12.

  Users are advised to verify the auto-populated data against their records before submission. Any errors are occurred, must be manually corrected or added to Table 12 before final submission.

CGST Notification - Dated 8th April 2024


  The notified rate of interest per annum for the specified class of registered persons is set to 'Nil'. This provision offers relief to a specific group of taxpayers who missed their filing deadlines under the GST Act.

Conduct of Joint Audits by CGST / SGST Officers


  The Chief Commissioner of Central Tax, Central Excise, and Customs for Thiruvananthapuram Zone held a meeting with the Special Commissioner, SGST on 21.03.2024. It was decided that both CGST and SGST Audit Teams would collaborate and participate in each other's audits.

  The Chief Commissioner directed that each Audit Circle of CGST should share its monthly Audit Plan with SGST counterparts

  The Commissioner instructed Circle AC/DCs to coordinate with State GST authorities and develop a framework to initiate joint audit work immediately as per the Chief Commissioner's directive.

50% GST Subsidy for CAPF Members at Kendriya Police Kalyan Bhandar


  Ministry of Home Affairs (MHA) has announced an extension of financial support, providing a 50% subsidy on Goods and Services Tax (GST) for purchases made from Kendriya Police Kalyan Bhandar.

  Effective from April 1, 2024, this initiative aims to support the welfare of CAPF members and their families.

GSTN Advisory on GSTR-1/IFF: Introduction of New 14A and 15A tables


  This notification, No. 26/2022 – Central Tax dated 26th December 2022, introduces two new tables, Table 14A and Table 15A, in the GSTR-1 form.

  These tables are designed to capture the details of amendments to supplies made through e-commerce operators (ECO). E-commerce operators are required to collect tax under section 52 or pay tax under section 9(5) of the CGST Act, 2017.

  These new tables are now live on the GST common portal and will be available in the GSTR-1/IFF from the tax period of February 2024 onwards.

GSTN Advisory on Integration of E-Waybill system with New IRP Portals


  The Goods and Services Tax Network (GSTN) has successfully integrated E-Waybill services with four additional Invoice Registration Portals (IRPs) through the National Informatics Centre (NIC). This enhancement expands the existing services available on the NIC-IRP portal, ensuring that E-Waybill services, E-Invoicing, are now accessible across all six IRPs. Below are the websites for all six IRP portals:


Guidelines for Rectification of Demand Orders under DGST Act, 2017


  The rectification powers are provided in Section 161 of the GST Act for rectification of errors on the face of record

  The power of rectification is confined to only errors on the face of record and not for submission of further orders / details including the submissions not considered while passing the order

  For initiating motu rectification the reasons to be recorded in writing by the proper Officer.

  In case the Registered person wants to invoke rectification, he has to submit the application in the prescribed format within 3 months from the date of passing of the Original Order and the rectification order in Form DRC 08 should be passed within 6 months from the date of original order

  The rectification may not be done if an appeal has been preferred before Appellate authority by the Registered person

  The following type of scenarios can be considered for invoking rectification.

a) The amount paid and intimated to Authority vide DRC 03 not considered by the Authority while confirming the demand in the order

b) Arithmetical error like calculation error or error in tax type i.e IGST, CGST or DGST

Taxpayer Delays in Registration Post Successful Aadhar Authentication: CGST Rule 8 & 9 Compliance


  If Aadhaar authentication is completed (Rule 8(4A)), but further verification is needed based on risk profile (Rule 9(aa)), processing will occur within 30 days of submission.

  Online tracking module updates will reflect processing status changes for registration applications.

CBIC - CGST Notification of Public Tech Platform for Frictionless Credit Sharing - 22/02/2024


  This notification notifies the "Public Tech Platform for Frictionless Credit" (an open architecture information technology platform, conceptualised by the Reserve Bank of India) as the designated system for sharing information through the common portal based on consent, to facilitate credit-related processes or transactions under sub-section (2) of Section 158A of the Central Goods and Services Tax Act, 2017

GSTN Advisory on Enhanced E-Invoicing Initiatives and Portal Launch


New Features of the revamped E-Invoice Master Information Portal are as follows:

  New features include PAN-based search, automatic e-invoice exemption list, global search bar, enhanced local search, revamped advisory and FAQ section, daily IRN count statistics, dedicated mobile app section, improved accessibility compliance, and updated website policy.

  Introduction of internal e-invoice comprehensive health dashboard for better monitoring.

  Accessibility of e-invoicing reporting for eligible taxpayers via online, APIs, and mobile app, free of cost.

  Launch of e-invoice QR code verifier app for verification and search IRN functionality.

Press release on ‘Beware of Fake GST Summons: CBIC Caution


  Taxpayers can verify the authenticity of any communication, including summons, from the Central Board of Indirect Taxes and Customs (CBIC) through the 'VERIFY CBIC-DIN' window on the CBIC's website

  The CBIC has warned against fake GST summons and urged taxpayers to verify any communication received from GST authorities

  Taxpayers can also use the DIN Utility Search on the Directorate of Data Management (DDM), CBIC's online portal, to verify the authenticity of communications.

  Individuals receiving suspicious or potentially fake summons from DGGI / CBIC formations are encouraged to report them to the respective jurisdictional DGGI / CBIC office for verification and necessary action against the perpetrators.

Budget 2024 Highlights


Interim Budget 2024 Highlights with regard to Taxation

  The FM proposes no changes in the existing tax rates for direct and indirect taxes, including import duty.

  The government will withdraw old disputed direct tax demands of up to INR 25,000 related to F.Y. 2009-2010. In addition, outstanding direct tax demands of up to INR 10,000 will be withdrawn pertaining to F.Y. 2010-2011 to F.Y. 2014-2015.

  The Tax Breaks for start-ups, sovereign wealth investors, and pension funds will be extended until March 31, 2025.

However there are some changes proposed in the Finance Bill 2024 in the GST Act with regard Input distributor and penalty for non-registration of machines used in the manufacture of specified goods as noted hereunder.

  Clause 12 seeks to amend in Section 2(61) and Section 20 of the CGST Act to make distribution of credit by ISD mandatory where an office of a supplier receives invoices (including where GST is payable under Reverse Charge) for and on behalf of its distinct person.

  Clause 13 seeks to insert Section 122A in the CGST Act to prescribe a penalty for running unregistered machines used in manufacture of specified goods i.e., pan masala, tobacco and related tobacco products as per special procedure notified under Section 148

The amended provisions will come into effect after enactment of Finance Bill 2024.

CBIC - CGST Notification Issued on 30/01/2024


  The amendment focuses on Table II of the 02/2017 Central Tax notification, in which changes are being introduced to serial number 83, column (3), clause (ii). The modification involves the insertion of the figure and letter "411069," after the existing "411060."

Mandatory Bank Account Submission Advisory under CGST Rules, 2017 (Rule 10A)


  Registered taxpayers must submit their bank account details within 30 days of registration grant or before the due date of filing GSTR-1/IFF, whichever comes earlier.

  Taxpayer registration suspension after 30 days with intimation in FORM REG-31

  If the taxpayer updates bank account details in response to FORM REG-31, suspension is automatically revoked.

  If bank account details aren't updated after 30 days of FORM REG-31 issuance, registration may be considered for cancellation by the Officer.

GSTN Advisory on introduction of new Tables 14 & 15 in GSTR


  Notification No. 26/2022 – Central Tax, issued on December 26, 2022, introduced two new tables, Table 14 and Table 15, in the GSTR-1 form. These tables are designed to capture detailed information about supplies conducted through e-commerce operators (ECO).

  These newly added tables are now active on the GST common portal.

CBIC - CGST Notification Issued on 05/01/2024


  Extension of due date for filing of return in FORM GSTR-3B for the month of November, 2023 for the persons registered in certain districts of Tamil Nadu.

  Extension of due date for filing FORM GSTR-9 and FORM GSTR-9C for the Financial Year 2022-23 for the persons registered in certain districts of Tamil Nadu.

  Seeks to rescind Notification No. 30/2023-CT dated 31st July, 2023

  Seeks to notify special procedure to be followed by a registered person engaged in manufacturing of certain goods.

CGST and IGST Notification - Amendments to Schedule I - 2.5% Effective from January 4, 2024


  The amendments specified in the notification relate to Schedule I – 2.5%. The changes involve replacing certain entries against S. No. 165 and 165A in column (2) with new entries: “2711 12 00, 2711 13 00, 2711 19 10”.

CGST Notification - Extension of Time Limits


  Seeks to extend dates of specified compliances in exercise of powers under section 168A of CGST Act

GSTN Advisory on Date extension for reporting opening balance for ITC reversal


  This announcement introduces an extension for taxpayers to declare their opening balance for ITC (Input Tax Credit) reversal until January 31, 2024




Recent Advance Ruling



The car was supplied in July 2023.The applicant opted for a lower tax rate on their supplies. By choosing the lower tax rate, the applicant forfeited the right to claim input tax credit (ITC) on purchases of goods and services. Therefore, the applicant is not eligible to claim ITC for the purchase of the car under GST regulations.



The applicant M/s. Versatile Auto Components Pvt Ltd is a manufacturer of low speed electric two wheeler (below 250 Watts/0.25 KV) and spares & accessories for the same. The applicant would like to get clarification regarding which HSN code and GST rate for their products electrically operated vehicles, including two & three wheeled electric / motor vehicles and Electrical & mechanical spare parts of electric vehicle.

It is ruled that

(1) all electrically operated vehicles including three wheeled electric vehicles are classified under HSN 8703 and liable to 5% Tax under S.No. 242A of Schedule –I of Notification No. 01/2017 dt:28.06.2017 as amended by notification 12/2019 dt:31.07.2019 with effect from 01.08.2019

(2) As the goods “Electrical and Mechanical spare parts of electrical vehicles” does not have any reference under chapter 87 they fall under the residual entry S.No 453 of Schedule-III of Notification no. 01/2017 dt:28.06.2017 i.e., “Goods which are not specified in Schedule I, II, IV, V or VI” falling in any chapter of HSN and liable to 18% Tax



The Applicant M/s. Sai Service Pvt Limited is engaged in the business of supply of automobiles. As a part of its day-to-day business, the Applicant requires certain vehicles for demonstration purpose in the showrooms and are used for providing test drives to its potential customers, in order for them to understand the look and feel of the vehicle. The demo vehicle/s will be registered in the name of the company/dealership and can be retained as a demo / test vehicle only for (2) years. After (2) years the vehicle can be used in workshop as a replacement vehicle or sold with the written approval of the vendor company.

The demo vehicle/s is categorized as an asset and capitalized in the books without claiming any depreciation on the input tax component. Under this factual background the applicant wanted a ruling on whether the applicant is entitled to avail the input tax credit under capital goods of the tax charged on the supply of motor vehicles used for demonstration purpose.

It is ruled that if the applicant is making further supply of such demo vehicle he is eligible to claim ITC of the tax charged on such demo vehicles. However, if the applicant decides to keep the demo vehicle for use in their workshop as a replacement vehicle as per the test vehicle policy of the car manufacturer / vendor he is not eligible for ITC.

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