Notification No. 16/2019 - Integrated Tax (Rate) Explained

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Notification No. 16/2019 - Integrated Tax (Rate): Seeks to amend notification No 3/2017- Integrated Tax (Rate) dated 28.6.2017 so as to extend concessional IGST rates to specified projects under HELP/OALP, and other changes.

GST: [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 6 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on the recommendations of the Council,

Hereby makes the following amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.3/2017- Integrated 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. 668(E) dated the 28^th June, 2017, namely: -

In the said notification, -

in the TABLE, against S. No. 1, in column (3), after item (5), the following item shall be inserted, namely: -
“(6) Petroleum operations or coal bed methane operations undertaken under specified contracts under the Hydrocarbon Exploration Licensing Policy (HELP) or Open Acreage Licensing Policy (OALP)”;

in the ANNEXURE, against Condition No. 1, in clause (e), the following proviso shall be inserted, namely: -

“Provided that where the said goods so supplied are sought to be disposed of in non- serviceable form, after mutilation, the recipient of outward supply or the transferee, as the case may be, may at his option, pay the tax at the rate of 18 per cent. on transaction value of such goods subject to the condition that the recipient of outward supply or the transferee,

As the case may be, produces before the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, a certificate from a duly Authorized officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the said goods are non-serviceable and have been mutilated before disposal.”.

2. This notification shall come into force on the 1^st day of October, 2019.

(Ruchi Bisht)
Under Secretary to the
Government of India

📚 Frequently Asked Questions (FAQs): Notification No. 16/2019 - Integrated Tax (Rate)

Q1: What is Notification No. 16/2019 – Integrated Tax (Rate)?

Answer:
It is a GST notification that extends concessional IGST rates to goods supplied for petroleum and coal bed methane projects under HELP and OALP policies, by amending Notification No. 3/2017 – Integrated Tax (Rate).

Q2: From which date is Notification No. 16/2019 applicable?

Answer:
The notification is effective from 1st October 2019.

Q3: Which law empowers the government to issue this notification?

Answer:
It is issued under Section 6(1) of the Integrated Goods and Services Tax Act, 2017, based on recommendations of the GST Council.

Q4: What are HELP and OALP projects?

Answer:
HELP allows uniform licensing for all hydrocarbons
OALP enables bidders to choose exploration blocks anytime
Both policies aim to boost India’s domestic energy production.

Q5: Which supplies qualify for concessional IGST under this notification?

Answer:
Supplies of specified goods used in:
Petroleum exploration
Oil & gas production
Coal bed methane operations
under approved HELP/OALP contracts.

Q6: Who can claim the concessional IGST benefit?

Answer:
Contractors
Sub-contractors
EPC vendors
supplying goods to registered persons executing eligible HELP/OALP projects.

Q7: Is there any change in conditions under the original notification?

Answer:
Yes. A new proviso allows disposal of non-serviceable goods at 18% IGST after mutilation, subject to certification.

Q8: What certificate is required for disposing non-serviceable goods?

Answer:
A certificate from the Directorate General of Hydrocarbons (DGH) confirming:
Goods are non-serviceable
Goods have been mutilated before disposal

Q9: Who must submit the certificate?

Answer:
The recipient or transferee disposing of such goods must submit it to the jurisdictional GST officer.

Q10: Can the supplier choose between concessional rate and 18% IGST?

Answer:
Yes. For non-serviceable goods, the recipient may opt to pay 18% IGST on transaction value instead of following concessional conditions.

Q11: How does this notification reduce GST burden?

Answer:
It lowers upfront IGST on high-value imported or inter-state goods used in energy projects, improving cash flow and project viability.

Q12: Does this affect GST return filing?

Answer:
Yes. Supplies must be correctly reported in GSTR-1 and GSTR-3B reflecting concessional rates.
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Q13: What happens if conditions are violated?

Answer:
Non-compliance may lead to:
Recovery of differential tax
Interest & penalties
Consult experts via Finodha GST Compliance

Q14: How can Finodha help businesses under HELP/OALP?

Answer:
Finodha assists with:
GST structuring for energy projects
Return filing & compliance
Advisory on concessional notifications
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