Export of services: INR receipts via Special Rupee Vostro accounts qualify as permitted payment under export rules.
Payments received by Indian exporters of services in Indian rupees from designated Special Rupee Vostro Accounts of correspondent banks, established under the RBI INR settlement mechanism and recognized by the Foreign Trade Policy, shall be regarded as fulfilling the payment requirement in sub clause (iv) of the IGST Act definition of export of services, subject to compliance with RBI circulars, Foreign Trade Policy procedures, and any other statutory permissions or approvals.

Inverted duty GST refunds follow prospective formula changes and filing-date restrictions for specified goods only.
The amended formula for refund of unutilised input tax credit under an inverted duty structure applies prospectively to applications filed on or after 05.07.2022. Earlier applications remain subject to the pre-amendment formula. The restriction on such refunds for specified goods falling under Chapters 15 and 27 applies prospectively to applications filed on or after 18.07.2022. Pending applications filed before the respective effective dates are not affected.

GST applicability on services clarifies composite supply, pure agent treatment, job work rates, and governmental authority exemptions.
Clarifies that same line of business for concessional passenger transport treatment includes passenger transport and renting with operator but excludes leasing without operator; electricity bundled with rent/maintenance is a composite supply taxed at the principal supply rate while separately billed electricity supplied as a pure agent is excluded from value; job work converting barley to malt is job work in relation to food products attracting the lower food rate; District Mineral Foundations Trusts are Governmental Authorities eligible for the same GST exemptions; horticulture services to CPWD with goods value not exceeding 25% are exempt.

Imitation zari thread classification affirmed as taxable at a lower GST rate; metallised polyester film included and refunds barred.
Products made from metallised polyester or plastic film that fall within the HS description for yarn combined with or covered by metal are classified as imitation zari thread or yarn under Sl No. 218AA of Schedule I and attract the reduced GST rate recommended by the Council; refunds on polyester (metallised)/plastic film for inversion of tax rates are not permitted.

Guarantee taxability: personal guarantees are supplies but taxable value nil without consideration; corporate guarantees valued under related party rule.
A director's provision of a personal bank guarantee is treated as a supply of service between related persons even if without consideration; valuation follows related-party valuation and, where banking guidelines forbid payment to guarantors, the open market value may be treated as nil so the taxable value is zero, except in exceptional cases where remuneration is actually paid, in which case the taxable value equals such remuneration. Corporate guarantees between related entities, including holding-subsidiary, are also supplies and their taxable value is determined under the related-party valuation sub-rule introduced for corporate guarantees.

Place of supply for transportation services clarified: default recipient-location rule applies where recipient location is available.
For transportation of goods with supplier or recipient outside India, the place of supply follows the default rule: location of recipient where available, otherwise location of supplier. Transportation by mail or courier similarly follows the default rule. Advertising services: sale or grant of rights to use hoarding space is located where the immovable property is; mere display services by a vendor are advertising services governed by the default rule. Co-location services that include hosting and IT infrastructure are hosting services and follow the recipient-location default; purely renting physical space with basic infrastructure is renting of immovable property and located where the immovable property is.

Export of services in INR via Special Rupee Vostro Accounts meets permitted payment requirement under IGST, enabling export classification.
Payment of export proceeds in Indian rupees from designated Special Rupee Vostro Accounts of correspondent banks, opened by authorised dealer banks under the Special Vostro Account framework, fulfils the payment requirement in sub clause (iv) of Section 2(6) of the IGST Act for export of services, subject to the conditions and restrictions of the Foreign Trade Policy and extant central bank circulars and without prejudice to any other statutory permissions or approvals.

Imitation zari thread GST clarification applies 5% rate to metallised film-based yarn, with no inversion refund allowed.
GST rate on imitation zari thread or yarn made from metallised polyester film or plastic film falling under HS 5605 is clarified as 5% GST under the entry for imitation zari thread or yarn. The circular further states that no refund will be admissible on polyester film or plastic film on account of inversion of tax rate, and references the corresponding amendment to the State notification.

GST applicability on composite supplies: principal supply rate governs bundled electricity; pure agent actual-basis billing excluded.
Input tax credit in the same line of business is limited to passenger transport and renting with operator; leasing without operator is excluded. Electricity bundled with renting or maintenance is a composite supply taxed at the principal supply rate, while actual-basis pure agent billing for electricity is excluded from supply value. Job work converting barley to malt is classified as job work for food products and attracts the concessional job work rate. District Mineral Foundations Trusts are Governmental Authorities for exemption purposes. Horticulture services supplied to CPWD are exempt where goods do not exceed the prescribed value proportion.

GST rate on imitation zari thread clarified to include metallised polyester/plastic film; no refund for film inversion.
Imitation zari thread or yarn made from metallised polyester film/plastic film falling under HS 5605 are covered by the Schedule I entry for imitation zari and attract the reduced GST rate; no refund is permitted for polyester (metallised)/plastic film on account of rate inversion. The CBIC clarification has been applied mutatis mutandis under the Maharashtra GST Act and is clarificatory in nature.

GST applicability: clarifications on input tax credit, composite supplies, job work rates, and governmental exemptions.
Input tax credit in the same line of business is confined to passenger transport and renting with operator; leasing without operator is excluded and taxed like vehicle sale. Electricity bundled with renting or maintenance is a composite supply taxed at the principal supply rate, whereas bona fide pure agent reimbursements billed on actuals are excluded from value. Job work converting barley to malt attracts the lower job work rate for food products. State-set DMFTs are governmental authorities eligible for exemptions. Horticulture services to CPWD with goods 25% qualify for exemption under the specified notification.

GST rate classification for imitation zari clarified: metallised film-based yarn taxed at reduced rate; no refunds for film.
Imitation zari thread or yarn made from metallised polyester film or plastic film is classified under the imitation zari Schedule I entry and attracts the reduced GST rate recommended by the GST Council; no refunds are permitted for metallised polyester/plastic film on account of rate inversion.

GST applicability on services clarified: composite supply rules, pure agent treatment, job work for malt, and authority exemptions.
Clarification: "same line of business" for concessional passenger transport and renting with operator includes passenger transport and renting with operator but excludes leasing without operator; electricity bundled with renting or maintenance is a composite supply taxed as the principal supply unless supplied and billed by a supplier acting as a pure agent; job work converting barley into malt is job work in relation to food products and attracts the concessional rate for food-related job work; DMFTs set up by States qualify as Governmental Authorities for GST exemption; horticulture services to CPWD with goods value not exceeding 25% are exempt under specified state provisions.

Place of supply - default recipient location rule governs cross border transport, advertising display, and colocation hosting services.
Clarification prescribes that the default recipient location rule determines the place of supply for cross border transportation services (including mail and courier) where supplier or recipient is outside India: recipient location if available, otherwise supplier location. For advertising, sale or grant of rights to use hoarding space is treated as immovable property related with place of supply at the physical location; pure display services are governed by the default recipient location rule. Co location services are classified as hosting and IT infrastructure provisioning and follow the default recipient location rule, except where only physical space with basic infrastructure is supplied, in which case renting of immovable property rules apply.

GST classification clarified: composite supply, pure agent, job work rates, DMFT governmental exemption, and CPWD horticulture relief.
Clarifies that reduced-rate passenger transport and renting with operator (SAC 9964/9966) qualify as the same line of business but leasing without operator (SAC 9973) does not; electricity bundled with renting or maintenance is a composite supply taxed at the principal supply rate while electricity supplied as a pure agent and billed at actuals is excluded from value; job work converting barley into malt is job work in relation to food products and attracts 5% GST; DMFTs set up by States are Governmental Authorities and eligible for exemptions; horticulture services to CPWD with goods value 25% are exempt under Sr. No. 3/3A.

GST classification of imitation zari yarn clarified; metallised polyester film supplies attract reduced tax rate and no refunds.
Imitation zari thread or yarn produced from metallised polyester film or plastic film, when converted to metallised yarn and combined with textile yarns, is covered by the tariff description for metallised yarn and is to be treated as imitation zari thread or yarn attracting the concessional GST rate. The GST Council also directed that no refunds be allowed on polyester (metallised)/plastic film due to inversion of tax rate, and implemented the change by amending the relevant notification.

Taxability of guarantees: related party guarantees treated as supply of service; Rule 28 valuation and exceptions clarified.
Providing personal bank guarantees by directors is a supply of service between related persons and is valued under Rule 28; where RBI rules preclude payment, the open market value may be zero and thus no taxable value arises, except where remuneration is actually paid. Corporate guarantees between related persons, including holding company to subsidiary, are also a supply of service and their taxable value is determined under Rule 28 as amended by the newly inserted sub rule (2), which does not apply to personal guarantees.

Place of supply rules: transportation, advertising and colocation governed by default recipient location principles where service components prevail.
Following the amendment omitting the special rule, place of supply for transportation of goods where supplier or recipient is outside India is determined by section 13(2): recipient's location if available, otherwise supplier's location. For advertising: sale or grant of rights in hoarding space is a service related to immovable property with place of supply at the property location; pure display services are advertising services with place of supply under section 12(2). Co-location services that include hosting and IT infrastructure components are treated as IT provisioning services with place of supply at the recipient's location, but pure space-rentals with basic infrastructure are renting of immovable property.

Payment in INR via Special Rupee Vostro Accounts qualifies as export of services under IGST Act, subject to RBI conditions.
Payments received in Indian rupees from balances in designated Special Rupee Vostro Accounts opened by AD banks, as permitted by RBI A.P. (DIR Series) Circular No.10 and reflected in FTP 2023, shall be treated as fulfilling the payment condition in sub clause (iv) of the IGST Act definition of export of services, subject to compliance with RBI and FTP conditions and any other statutory permissions.

GST rate on imitation zari clarified: metallised plastic-film yarn attracts reduced tax while no refunds allowed for film inversion
Imitation zari thread or yarn made from metallised polyester film or plastic film falls within HS 5605 and is covered by the Schedule I entry attracting the reduced GST rate; no refund is permitted for polyester or plastic film on account of inversion of tax rates, and corresponding amendments to the State Tax (Rate) notification are being made. The Circular is clarificatory and implementation issues should be reported to the Commissioner.