Important Keyword: Notification No. 16/2023 – Central Tax (Rate), GST e-commerce, omnibus GST rule, CGST amendment, reverse charge, GST transport rules,
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[F. No. CBIC-190354/195/2023-TO (TRU-II)-CBEC]
Government of India
Ministry of Finance
(Department of Revenue)
New Delhi, 19th October, 2023
Notification No. 16/2023 - Central Tax (Rate): Seeks to amend Notification No 17/2017- Central Tax (Rate) dated 28.06.2017.
[TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUBSECTION (i)]
G.S.R (E).- In exercise of the powers conferred by sub-section (5) of section 9 of the CGST Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.17/2017- Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 696(E) dated the 28th June, 2017, namely:-
In the said notification,
(i.) in clause (i), for the words “omnibus or any other motor vehicle”, the words “or any other motor vehicle except omnibus” shall be substituted;
(ii.) after clause (i), the following clause shall be inserted, namely:-
“(ia) services by way of transportation of passengers by an omnibus except where the person supplying such service through electronic commerce operator is a company.”;
(iii.) in the Explanation, after item (c), the following item shall be inserted, namely, -
“(d) “Company” has the same meaning as assigned to it in clause (20) of section 2 of the Companies Act, 2013(18 of 2013).”.
2. This notification shall come into force with effect from the 20th day of October, 2023.
(Rajeev Ranjan)
Under Secretary to the Government of India
Note:- The principal notification No. 17/2017 -Central Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 696 (E), dated the 28th June, 2017 and was last amended by notification No. 17/2021 -Central Tax (Rate), dated the 18th November, 2021 vide number G.S.R. 813(E), dated the 18th November, 2021.
📚 Frequently Asked Questions (FAQs): Notification No. 16/2023 – Central Tax (Rate)
Q1: What is Notification No. 16/2023 – Central Tax (Rate) all about?
Answer:
This notification modifies earlier provisions in Notification No. 17/2017. The key changes include:
Excluding “omnibus” from the category of motor vehicles liable to reverse charge under certain conditions.
Inserting a clause that covers services of transporting passengers by omnibus unless provided through e-commerce platforms by companies.
Q2: What changes were made to clause (i) of Notification No. 17/2017?
Answer:
The words “omnibus or any other motor vehicle” have been replaced with “or any other motor vehicle except omnibus”. This implies that “omnibus” services are excluded from certain reverse charge mechanisms unless specific conditions apply.
Q3: What is the newly inserted clause (ia)?
Answer:
Clause (ia) states:
“Services by way of transportation of passengers by an omnibus except where the person supplying such service through an electronic commerce operator is a company.”
This means if the omnibus service is supplied via an e-commerce platform by a company, it will fall under the purview of reverse charge.
Q4: How is a “company” defined for this rule?
Answer:
According to the Explanation inserted by this notification, “Company” carries the same meaning as per Section 2(20) of the Companies Act, 2013. This includes all entities legally registered as companies under Indian law.
Q5: What is the effective date of Notification No. 16/2023?
Answer:
The changes under this notification came into force from 20th October 2023.
Q6: How does this notification impact Electronic Commerce Operators (ECOs)?
Answer:
ECOs must now differentiate between omnibus services provided by companies and non-companies:
If the supplier is a company, reverse charge provisions may apply.
If not, such services are excluded under the reverse charge mechanism.
Q7: Does this affect regular motor vehicle passenger transport services?
Answer:
No, this update specifically addresses “omnibus” services. Other motor vehicle passenger services remain governed by previous rules unless separately amended.
Q8: How should companies update their GST compliance post this notification?
Answer:
Companies engaged in omnibus transport via e-commerce should:
Reassess their GST applicability under RCM.
Update compliance and registration details.
For expert help, consult GST professionals at www.Finodha.in or explore GST Compliance services: https://finodha.in/gst-compliance/
Q9: Is GST registration needed for all omnibus service providers?
Answer:
Not necessarily. Only those crossing the threshold turnover or meeting other registration criteria (especially if supplying via ECOs) are required to register. Check eligibility here: https://finodha.in/online-gst-registration/
Q10: Where can I file or revise my GST returns considering these changes?
Answer:
You can file or revise GST returns using the simplified platform provided at: https://finodha.in/gst-return-filing/
📝 Summary:
Notification 16/2023 clarifies the treatment of passenger transport by omnibus under GST, especially through ECOs. It excludes such services from reverse charge unless supplied by a company via an e-commerce platform. This aims to streamline compliance for small service providers while keeping large entities accountable.
✅ Suggested Action:
If you’re operating a transport business or an e-commerce platform, revisit your compliance strategy and seek expert guidance. For a hassle-free GST experience, explore the suite of services available at www.Finodha.in.
Download PDF: Notification No. 16/2023 – Central Tax (Rate)
More Information: https://taxinformation.cbic.gov.in/
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