Ice-cream parlours to attract 18% goods and services tax: CBIC

Ice-cream parlours will attract 18% goods and services tax (GST) with input tax credit, whether sold by a parlour or any similar outlet, the Central Board of Indirect Taxes and Customs (CBIC) said on Wednesday as part of a detailed clarification on tax liability of several items.

It said in a circular that past tax dues of ice-cream parlours that attracted GST at the rate of 5% without input tax credit shall be treated as fully GST paid to avoid unnecessary litigation.

"Since the decision is only to regularise the past practice, no refund of GST shall be allowed, if already paid at 18%," said the CBIC.

It also said that fees charged from prospective students for entrance or admission, or for issuance of eligibility certificates and services associated with transit cargo both to and from Nepal and Bhutan, are exempted from GST.

Fines and penalty chargeable by government or a local authority imposed for violation of a statute, bye-laws, rules or regulations are also exempted from GST, said the CBIC.

 

Activity of selling space for advertisement in souvenirs published in the form of books is eligible for concessional GST rate of 5%, it said.

The circular also clarified that cancellation charges recovered by hotels, and tour and travel operators, will be taxed at the same GST rate as applicable to principal service.

In instances where an employee's salary is forfeited or some amount is recovered pursuant to a bond where the person leaves the employment before the minimum agreed period, it will be exempt from GST.

An electric vehicle, with or without batteries will attract a 5% GST rate while mangoes, other than fresh mangoes, sliced mangoes and dried mangoes, will attract a GST rate of 12%. Similarly, pulses as cattle feed by the dairy industry will attract 5% GST.

The pro-active step taken by the CBIC by issuance of present clarifications are likely to be beneficial to industries across various sectors."Saurabh Agarwal, Tax Partner, EY said.

 Source::: The Economic Time,     dated 04/08/2022.