Summary of Recent CBIC Circulars on GST Applicability

The Central Board of Indirect Taxes and Customs (CBIC) has issued several circulars on 17th June 2021 regarding Goods and Services Tax (GST). These circulars are issued based on the discussions during the 43rd GST Council meeting. This article provides a summary of those circulars.

1. The CBIC circular No. 149/05/2021-GST clarified that the anganwadis, which provides pre-school non-formal education, are covered in the definition of educational institutes. Hence, the services provided to an educational institution, including pre-schools and anganwadis, by way of serving food such as mid-day meals are exempt from GST irrespective of whether government grants or corporate donations fund it.
2. The CBIC circular No.150/06/2021-GST clarified that the GST is exempted on services in the form of access to road or bridge, whether the considerations are in the form of toll or annuity. Also, the exemption entry does not cover the construction of road services, even if deferred payment is made by way of instalments. Hence, GST is chargeable on the deferred payments made to builders to construct roads and bridges.
3. Circular No. 151/07/2021-GST clarified that central and state educational boards are treated as educational institutions for the limited purpose of conducting examinations to the students. Hence, the exam fees paid by students to various central and state education boards, including the National Board of Examination (NBE), are not subject to GST. Also, GST is exempt on input services relating to admission to or conduct of examination, such as online testing service, result publication, printing notification for examination, admit card and questions papers, etc., when provided to such boards. However, the accreditation services provided to educational institutions by these boards are subject to GST.
4. The CBIC circular No. 152/08/2021-GST clarified that works contract service provided to any government agency in the form of ropeways construction are taxable at 18%, not at 12%.
5. The CBIC circular No. 153/09/2021-GST clarified that services of milling wheat into flour or paddy into rice are not eligible for exemption value of goods supplied in such a composite supply exceeds 25%. Hence, a GST of 5% will be charged on milling wheat into flour or paddy into rice for distribution by state governments under the Public Distribution System (PDS).
6. The CBIC circular No.154/10/2021-GST clarified that the guaranteeing of loans by central or state governments for their undertaking or PSU is exempt from GST.
7. The CBIC circular No. 155/11/2021-GST clarified that the laterals/parts used solely or principally with sprinklers or drip irrigation systems attract a GST of 12%, even if they are supplied separately.

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