Is GST required for FSSAI?
Is GST required for FSSAI?
The Food Safety and Standards Authority of India (FSSAI), on July 27th, 2022, issued a notice regarding the applicability of Goods and Services Tax on the services provided by FSSAI. With this, FSSAI announced that GST at the prescribed rate would be applicable on all services provided by FSSAI commencing July 18th, 2022. Now services like issuing a Central license, Food Safety Mitra Fees, Product Approval Fees, Import Clearance Fees, and so forth will attract an 18% service tax. In this article, we will look at whether GST is required for FSSAI in detail.
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Synopsis of Notification
From 18th July 2022, the Government has withdrawn the GST exemption on services provided by the Food Safety and Standards Authority of India (‘FSSAI’) to Food Business Operators by way of licensing, registration, and analysis/testing of food. In other words, these services of FSSAI are now subject to GST.
- As mentioned above, FSSAI has clarified the applicability of GST on services provided by FSSAI.
- It is notified to all stakeholders that GST at the prescribed rate would apply to all services provided by FSSAI commencing July 18, 2022.
- The rates for various services, such as the issue of a Central license, product approval fee, food safety Mitra fee, import clearance fee, etc., will be revised accordingly.
Earlier No GST for FSSAI Services
Under serial 47A of the Central tax rates of the GST Act issued in 2017, services by way of licensing, registration, and analysis or testing of food samples supplied by the Food Safety and Standards Authority of India (FSSAI) to Food Business Operators attracted nil tax. Now, these services will attract an 18% service tax.
18% service tax for FSSAI license
The government has withdrawn the exemption given to the FSSAI on service tax. It has issued a notification to bring services offered by the food authority under Goods and Services Tax (GST). Now services like issuing a Central license will attract an 18% service tax.
As a result, the FSSAI has published a notification addressing the implementation of GST on services offered by the food authority, such as Central License issuance, Food Safety Mitra Fees, Product Approval Fees, Import Clearance Fees, and so forth.
The official notification of FSSAI is attached here for reference:
Is GST required for FSSAI?- FSSAI OrderExemption on the following services is being withdrawn – GST notification No. 04/2022
Highlights of rate notification issued on 13/07/2022 Giving effect to the recommendation of the 47th GST Council Meeting, the CBIC has published GST notification No. 04/2022 – central tax dated July 13, 2022. The rate changes recommended by the 47th GST Council will be made effective from July 18, 2022.
GST Exemption on the following services is being withdrawn with this notification.
| Sector | Exemption on the following services is being withdrawn. |
|||
| Railways | Transportation by rail or a vessel of railway equipment and material. | Exempted | Taxable | |
| Warehousing business | Fumigation in a warehouse of agricultural produce. | |||
| RBI, IRDA, SEBI, FSSAI | Services by RBI, IRDA, SEBI, FSSAI, | |||
| Owner of Residential house renting the same | We are renting residential dwellings to registered persons. | Exempted | Taxable under RCM | |
| Blood banks | Services provided by the cord blood banks by way of preservation of stem cells | |||
| Doctors / Hospitals | Like CETPs, common bio-medical waste treatment facilities for treatment or disposal of biomedical waste shall be taxed at 12% to allow them ITC | 12% | ||
| Hotel Industry | Hotel accommodation priced up to Rs. 1000/day shall be taxed at 12% |
Nil
|
12%
|
|
| Doctors / Hospitals | Room rent (excluding ICU) exceeding Rs 5000 per day per patient charged by a hospital shall be taxed to the amount charged for the room at 5% without ITC. | Nil | 5% | |
| Airline Industry, Travellers to the North Eastern States | Exemption on the transport of passengers by air to and from NE states & Bagdogra is restricted to economy class. Business Class would be taxable. |
All class
|
Business class taxable
|
|
