This circular provides clarifications on the applicability of GST and availability of input tax credit (ITC) in respect of certain commonly disputed services.

It clarifies that exemption from GST on loading, unloading, packing, storage or warehousing is available only for agricultural produce as defined under GST law. Processed products such as black or white tea, processed coffee, jaggery, de-husked or split pulses, processed spices, dry fruits and cashew nuts do not qualify as agricultural produce since their essential characteristics are altered through processing. Accordingly, GST exemption is not available for warehousing or storage of such processed items.

The circular further clarifies that GST is applicable on inter-State stock transfers of aircraft engines, parts and accessories between distinct persons, even when made without consideration. However, ITC of GST paid on such goods is available and can be used to discharge GST liability on such inter-State transfers, notwithstanding restrictions on ITC for passenger transport services in economy class.

It also clarifies that general insurance services provided under schemes where the entire premium is paid by the Central or State Government are exempt from GST. Further, insurance services provided by State Governments to their employees, police personnel, electricity department employees or students are also exempt, in line with existing exemption notifications.

These clarifications aim to ensure uniform interpretation of GST provisions and avoid disputes in the identified areas.