Circular No. 34/8/2018-CGST, (F. No. 354/17/2018-TRU), Clarifications regarding GST in respect of certain services;jsessionid=A57C1B2CE27188A90FB1DB5748848EA2

Circular No. 34/8/2018-GST
F. No. 354/17/2018-TRU
Government of India
Ministry of Finance
Department of Revenue
Tax research Unit
Room No. 146G, North Block,
New Delhi, 1
st March 2018
The Principal Chief Commissioners/ Chief Commissioners/ Principal
Commissioners/ Commissioner of Central Tax (All) /
The Principal Director Generals/ Director Generals (All)
Subject: Clarifications regarding GST in respect of certain services
I am directed to issue clarification with regard to the following issues as approved by
the Fitment Committee to the GST Council in its meeting held on 9th
, 10th and 13th January
Issue Clarification
1. Whether activity of bus body
building, is a supply of goods
or services?
In the case of bus body building there is supply of
goods and services. Thus, classification of this
composite supply, as goods or service would depend
on which supply is the principal supply which may be
determined on the basis of facts and circumstances of
each case.
2. Whether retreading of tyres
is a supply of goods or
In retreading of tyres, which is a composite supply,
the pre-dominant element is the process of retreading
which is a supply of service. Rubber used for
retreading is an ancillary supply. Which part of a
composite supply is the principal supply, must be
determined keeping in view the nature of the supply
involved. Value may be one of the guiding factors in
this determination, but not the sole factor. The
primary question that should be asked is what is the
essential nature of the composite supply and which
element of the supply imparts that essential nature to
Circular No. 34/8/2018-GST
the composite supply.
Supply of retreaded tyres, where the old tyres belong
to the supplier of retreaded tyres, is a supply of goods
(retreaded tyres under heading 4012 of the Customs
Tariff attracting GST @ 28%)
3. Whether Priority Sector
Lending Certificates
(PSLCs) are outside the
purview of GST and
therefore not taxable?
In Reserve Bank of India FAQ on PSLC, it has been
mentioned that PSLC may be construed to be in the
nature of goods, dealing in which has been notified as
a permissible activity under section 6(1) of the
Banking Regulation Act, 1949 vide Government of
India notification dated 4th February, 2016. PSLC are
not securities. PSLC are akin to freely tradeable duty
scrips, Renewable Energy Certificates, REP license
or replenishment license, which attracted VAT.
In GST there is no exemption to trading in PSLCs.
Thus, PSLCs are taxable as goods at standard rate of
18% under the residuary S. No. 453 of Schedule III
of notification No. 1/2017-Central Tax(Rate). GST
payable on the certificates would be available as ITC
to the bank buying the certificates.
4. (1) Whether the activities
carried by DISCOMS
against recovery of charges
from consumers under State
Electricity Act are exempt
from GST?
(2) Whether the guarantee
provided by State
Government to state owned
companies against
guarantee commission, is
taxable under GST?
(1) Service by way of transmission or distribution of
electricity by an electricity transmission or
distribution utility is exempt from GST under
notification No. 12/2017- CT (R), Sl. No. 25. The
other services such as, -
i. Application fee for releasing connection of
ii. Rental Charges against metering
iii. Testing fee for meters/ transformers,
capacitors etc.;
iv. Labour charges from customers for
shifting of meters or shifting of service lines;
Circular No. 34/8/2018-GST
v. charges for duplicate bill;
provided by DISCOMS to consumer are taxable.
(2) The service provided by Central
Government/State Government to any business entity
including PSUs by way of guaranteeing the loans
taken by them from financial institutions against
consideration in any form including Guarantee
Commission is taxable.
2. Difficulty if any, in the implementation of this circular may be brought to the notice
of the Board.
Yours Faithfully,
Harsh Singh
Technical Officer (TRU)
Tel: 011-23095543