Recent Amendments in GST
Feb 6, 2025
We
have given a brief summary of the recent amendments proposed by the 55th
GST council meeting held on 21-12-2024 and notified with effect from the dates
given below against each entry.
1. GST
Rate on all old and used vehicles will be 18% w.e.f 16.01.2025 (CTR NN: 4/2025 dated 16.01.2025)
GST
is applicable on the margin on sale in case of an old or used vehicle. Where
there is no margin on sale, GST is Nil 
1.1 What
is the margin on sale?
- In case of a registered person who has
claimed depreciation under Income Tax Act on the said vehicle:-Margin= Sale value of
the vehicle- WDV of the vehicle
- In other cases where a person is not claiming depreciation under the Income Tax Act :- Margin= Sale value of the vehicle- Purchase value of the vehicle
1.2 GST
Rate on Margin on sale pre and post the recent notification
|
Type of Vehicle
|
GST Rate upto
15.01.2025
|
GST Rate from
16.01.2025
|
Remarks
|
|
Old and used, petrol Liquefied
petroleum gases (LPG) or compressed natural gas (CNG) driven motor vehicles
of engine capacity of 1200 cc or more and of length of 4000 mm or more.
|
18%
|
18%
|
No Change
|
|
Old and used, diesel
driven motor vehicles of engine capacity of 1500 cc or more and of length of
4000 mm
|
18%
|
18%
|
No Change
|
|
Old and used motor
vehicles of engine capacity exceeding 1500 cc, popularly known as Sports
Utility Vehicles (SUVs) including utility vehicles.
|
18%
|
18%
|
No Change
|
|
All Old and used
Vehicles other than those mentioned above
|
12%
|
18%
|
Amended
|
2. GST
Rate change for Restaurant Services w.e.f 01.04.2025 (CTR
NN: 5/2025 dated 16.01.2025)
The
proposed amendment will have an impact only on those restaurant service
providers who also provide hotel accommodation in addition to restaurant
services in the same premise
2.1 Meaning
of Hotel Accommodation
‘Hotel
accommodation’ means supply, by way of accommodation in hotels, inns, guest
houses, clubs, campsites or other commercial places meant for residential or
lodging purposes including the supply of time share usage rights by way of
accommodation.
2.2 The GST rate for restaurants that also
provide accommodation services was driven by the criteria of whether the
restaurant is situated in a specified premise or not. If the restaurant
services are provided other than at specified premises the rate of GST was 5%
without the benefit of ITC.
There
has been a significant amendment in the definition of Specified premises that
will impact the determination of GST Rate.
2.3 Definition
of Specified premises upto 31.03.2025
Specified
premises means premises providing ‘hotel accommodation’ services having
declared tariff of any unit of accommodation above Rs.7,500/- per unit per day
or equivalent.
2.4 Definition
of Specified premises from 01.04.2025
“Specified
premises”, for a financial year, means,-
(a)
a premises from where the supplier has provided in the preceding financial
year, ‘hotel accommodation’ service having the value of supply of any unit of
accommodation above Rs.7,500/- per unit per day or equivalent; or
(b)
a premises for which a registered person supplying ‘hotel accommodation’
service has filed a declaration, on or after the 1st of January and not later
than 31st of March of the preceding financial year, declaring the said premises
to be a specified premises; or
(c)
a premises for which a person applying for registration has filed a
declaration, within fifteen days of obtaining acknowledgement for the
registration application, declaring the said premises to be a specified
premises;
2.5 Concept
of Declared Tariff has been omitted from the definition of specified premises
The
concept of declared tariff has been removed from the definition of specified
premises. Therefore wherever hotel accommodation is provided for a value above
Rs.7,500/- such premise will fall into the category of specified premises and
the GST rate of 18% will apply.
2.6 Opt
in declaration to be submitted by suppliers providing restaurant services along
with hotel accommodation before 31.03.2025 if the supplier want to adopt GST
rate 18% with ITC benefit from FY 2025-26 onwards.
2.7 GST
Rate on restaurant services pre and post the recent notification
|
Category
|
GST
Rates upto 31.03.2025
|
GST
Rates from 01.04.2025
|
Remarks
|
|
Restaurant services with no hotel
accommodation
|
5%
without ITC
|
5%
without ITC
|
No
Change
|
|
Restaurant services with hotel
accommodation where value of supply is above Rs.7,500/- per unit of
accommodation
|
18%
with ITC
|
18%
with ITC
|
No
Change
|
|
Restaurant services with hotel
accommodation where value of supply does not exceed Rs.7,500/- per unit of
accommodation and where opt in declaration is not submitted before 31.03.2025
|
5%
without ITC
|
5%
without ITC
|
No
Change
|
|
Restaurant services with hotel
accommodation where value of supply does not exceed Rs.7,500/- per unit of
accommodation and where opt in declaration is submitted before 31.03.2025
|
5%
without ITC
|
18%
with ITC
|
Amended
|
2.8 In
case of suppliers who have opted for the GST Rate of 18% shall have to
discharge the taxes even when the supplies are made through E-Commerce
operators.
3. Amendments
in the RCM Liability w.e.f 16.01.2025 (CTR
NN: 7/2025 dated 16.01.2025)
- Sponsorship services provided to a partnership firm or body corporate was liable to RCM in the hands of the body corporate or partnership firm until 15.01.2025. From 16.01.2025, if the sponsorship services are provided by a body corporate to any person, the body corporate will collect and pay the taxes under Forward Charge Mechanism (FCM).
- Service by way of renting of any immovable property other than residential dwelling from an unregistered person was brought under RCM from October 2024.It has now been clarified that a person who is under composition levy will not have to pay tax under RCM in respect of renting of immovable property from an unregistered person.
-CA.
Lakshmi Viswanath
