Update on Exemption for Satellite Launch Services in Notification No. 7/2023-Central Tax (Rate)
Simplified Explanation of Notification No. 7/2023-Central Tax (Rate)
Purpose: This notification updates the exemption rules for certain services under the Goods and Services Tax (GST) regime. Specifically, it revises the entry related to “Satellite launch services” to ensure its correct classification for exemption.
Key Amendment:
- Update to Exempt Services List:
- Old Entry: The previous notification (No. 12/2017-Central Tax (Rate)) listed services related to satellite launch in a certain way.
- New Entry: The updated notification specifies “Satellite launch services” as a category of services that are exempt from Central Goods and Services Tax (CGST).
Explanation:
- Exempt Services: These are services on which no GST is charged. This means that businesses providing these services do not have to collect GST from their customers.
- NIL Rated Services: Sometimes, services are classified as NIL rated, meaning they are subject to a 0% GST rate but still reported in GST returns.
Example:
- Before Amendment: Satellite launch services might have been listed under a different category or with additional qualifiers.
- After Amendment: The notification clearly identifies “Satellite launch services” as exempt from CGST. This means if a company provides satellite launch services, they do not need to charge CGST on these services.
Effective Date:
- The changes in the exemption rules come into effect from July 27, 2023.