Important Keyword: Notification No. 16/2021 – Central Tax (Rate), GST exemption amendment, GST e-commerce operator services, Notification 12/2017 amendment, GST changes 2022, Notification No. 16/2021 Central Tax Rate, GST service exemptions, GST amendment 2021, GST e-commerce operator rule, GST compliance changes,
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[F. No. 354/207/2021-TRU]
Government of India
Ministry of Finance
(Department of Revenue)
New Delhi, 18th November, 2021.
Notification No. 16/2021 - Central Tax (Rate): Seeks to amend Notification No 12/2017- Central Tax (Rate) dated 28.06.2017.
Table of Contents
[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-sections (3) and (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following amendments further to amend the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.12/2017- 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. 691(E), dated the 28th June, 2017, namely: -
In the said notification, in the TABLE, -
- against serial number 3, in column (3), in the heading “ Description of Services” , the words “or a Governmental authority or a Government Entity” shall be omitted;
- against serial number 3A, in column (3), in the heading “ Description of Services “, the words “or a Governmental authority or a Government Entity” shall be omitted;
- against serial number 15, in column (3), in the heading “ Description of Services “, after item (c), the following shall be inserted, namely, -
“Provided that nothing contained in items (b) and (c) above shall apply to services supplied through an electronic commerce operator, and notified under sub-section (5) of Section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017).”; - against serial number 17, in column (3), in the heading “ Description of Services “, after item (e), the following shall be inserted, namely, -
“Provided that nothing contained in item (e) above shall apply to services supplied through an electronic commerce operator, and notified under sub-section (5) of Section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017).”
2. This notification shall come into force with effect from 1st day of January, 2022.
(Rajeev Ranjan)
Under Secretary to the Government of India
Note: The principal notification was published in the Gazette of India, Extraordinary, vide notification No. 12/2017 - Central Tax (Rate), dated the 28th June, 2017, vide number G.S.R. 691 (E), dated the 28th June, 2017 and last amended by notification No. 07/2021 - Central Tax (Rate), dated the 30th September, 2021 vide number G.S.R. 688(E), dated the 30th September, 2021.
📚 Frequently Asked Questions (FAQs): Notification No. 16/2021 - Central Tax (Rate)
Q1: What is Notification No. 16/2021 – Central Tax (Rate)?
Answer:
Notification No. 16/2021 – Central Tax (Rate), issued on 18th November 2021, amended Notification No. 12/2017 – Central Tax (Rate). It primarily:
✔ Removed exemptions for Governmental Authorities and Government Entities in certain services.
✔ Clarified that exemptions do not apply to services supplied through e-commerce operators covered under Section 9(5) of the CGST Act.
👉 Effective from 1st January 2022.
For GST compliance, consult GST Experts.
Q2: What changes were made for Governmental Authorities & Entities?
Answer:
Earlier, certain service exemptions under Serial No. 3 and 3A extended to Governmental Authorities or Government Entities.
🚫 Notification 16/2021 omits those words, meaning such entities will no longer automatically enjoy exemptions.
For advisory on Government contracts & GST, explore GST Compliance Services.
Q3: How are e-commerce operators impacted by this notification?
Answer:
Two key provisions were added:
Serial No. 15: Exemption under items (b) & (c) won’t apply if services are supplied through an e-commerce operator notified under Section 9(5).
Serial No. 17: Same restriction for item (e).
👉 This ensures GST is collected where e-commerce platforms supply specified services.
Businesses working online can explore Online GST Registration.
Q4: What does Section 9(5) of CGST Act mean in this context?
Answer:
Under Section 9(5), certain notified services supplied via e-commerce operators (like cab services, hotel bookings, restaurant services) make the operator liable to pay GST instead of the supplier.
Notification 16/2021 clarified that exemptions won’t apply when services fall under this section.
For support in digital compliance, check Digital Signature Certificate (DSC).
Q5: Which services were directly affected by this amendment?
Answer:
1️⃣ Services under Serial No. 3 & 3A (Governmental Authority exemptions).
2️⃣ Services under Serial No. 15 (transportation by non-aircon contract carriage, stage carriage).
3️⃣ Services under Serial No. 17 (services by way of renting of rooms or accommodation up to certain tariff limits).
For service-based businesses, GST Return Filing ensures smooth compliance.
Q6: From when did Notification No. 16/2021 become applicable?
Answer:
It came into force on 1st January 2022. Businesses and e-commerce operators had to update GST applicability, invoicing systems, and exemptions immediately.
For startups setting up digital platforms, check Setup Business.
Q7: How does this notification affect businesses operating via e-commerce?
Answer:
✅ Removes ambiguity around exemptions.
✅ Makes e-commerce operators responsible for GST in many cases.
✅ Ensures a level playing field with offline businesses.
If you’re an MSME selling online, consider MSME Registration.
Q8: How does Notification No. 16/2021 link with other amendments in 2021?
Answer:
Notification 16/2021 ➝ Focused on exemptions & e-commerce services.
Notification 17/2021 ➝ Covered reverse charge for vehicles & restaurants.
Notification 18/2021 ➝ Updated GST rates for goods under schedules.
Together, they reflect comprehensive GST updates effective Jan 2022.
For holistic compliance, check Private Limited Company Compliance.
Q9: What steps should businesses take to comply with Notification 16/2021?
Answer:
✔ Review contracts with Government Authorities/Entities.
✔ Update GST applicability for e-commerce supplies.
✔ Avoid wrongly claiming exemptions post 1st Jan 2022.
✔ Get professional assistance for regular compliance.
Consult Finodha GST Professionals for end-to-end support.
Download PDF: Notification No. 16/2021- Central Tax (Rate)
More Information: https://taxinformation.cbic.gov.in/
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