Different Services under GST:



Different Services under GST:

Following are the various type services under GST such as

  • Negative Services
  • Deemed Services
  • Declared services
  • Services covered under Reverse Charge

1.   Negative Services:

This concept is already in service tax. Such same concept is continued under GST also. Following are the list of negative services which does not amounting to Supply of Services

·         Services by an employee to the employer in the course of or in relation to his employment.

·         Services by any Court or Tribunal established under any law for the time being in force.

·         (a) The functions performed by the Members of Parliament, Members of State Legislature, Members of Panchayats, Members of Municipalities and Members of other local authorities;

    1. The duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that capacity; or
    2. The duties performed by any person as a Chairperson or a Member or a Director in a body established by the Central Government or a State Government or local authority and who is not deemed as an employee before the commencement of this clause.

·         Services by a foreign diplomatic mission located in India.

·         Services of funeral, burial, crematorium or mortuary including transportation of the deceased.

·         Actionable claims, other than lottery, betting and gambling

2.  Deemed Services:

There are some services which is even if provided to without any consideration still, it will attract GST payment.

  • Permanent transfer or disposal of business assets where input tax credit has been availed on such assets.
  • Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business:

Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both.

  • Supply of goods—

(a) by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or

(b) by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal.

  • Import of services by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business.

3. Declared Services:

In the pre GST era, work contract was taxed in both act, but now in GST, Government has cleared the confusion and declared it whether it should be classified as service or goods.

Should be classified as supply of Goods-

  1. any transfer of the title in goods
  2. any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed,
  3. where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer or disposal
  4. Supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration.

Should be classified as supply of services:

  1. any transfer  of right in goods or of undivided share in goods without the transfer of title thereof,
  2. any lease, tenancy, easement, license to occupy land
  3. any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly,
  4. Treatment or process Any treatment or process which is applied to another person’s goods
  5. where, by or under the direction of a person carrying on a business, goods held or used for the purposes of the business are put to any private use or are used, or made available to any person for use, for any purpose other than a purpose of the business, whether or not for a consideration, the usage or making available of such goods
  6. renting of immovable property;
  7. Construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier.
  8. temporary transfer or permitting the use or enjoyment of any intellectual property right;
  9. development, design, programming, customization, adaptation, up gradation, enhancement, implementation of information technology software;
  10. agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; and
  11. transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration.
  12. works contract as defined in clause (119) of section 2; and
  13. Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration.

4. Reverse Charge Services:

  • Transport of goods by road
  • Legal services
  • Services provided by an arbitral tribunal
  • Sponsorship services
  • Services provided by government or local authority (excludes renting of immovable property, postal services, insurance and agency services, services provided to an aircraft or ship in an Indian air port or port and transport of goods/passengers)
  • Services offered by a director or corporate body to their own company
  • Services of an insurance agent
  • Recovery agent services
  • Transport of goods by a vessel from overseas to a customs office in India
  • Transfer/Giving permission to copyrighted content (as according to section 13(1) of copyright act 1957)
  • Taxi services through an e-commerce operator

CA Monika Rathi