This document (Circular No. 245/02/2025-GST) provides clarifications on various GST-related issues based on recommendations from the 55th GST Council meeting.

Penal Charges by Regulated Entities (REs)

• CBIC clarified that no GST is payable on the penal charges levied by Regulated Entities, in compliance with RBI directions dated 18.08.2023, for non-compliance with material terms and conditions of loan contract by the borrower.

GST Exemption for Payment Aggregators (PAs) in relation to settlement of an amount, up to Rs. 2,000 in a single transaction transacted through payment card services?

• CBIC clarified that GST exemption available to RBI regulated Payment Aggregators (PAs) in relation to settlement of an amount, up to Rs. 2,000 in a single transaction, transacted through payment card services, as PAs fall within the definition of ‘acquiring bank’ (explained below). It is also clarified that this exemption is limited to payment settlement function only, which involves handling of money, and does not cover Payment Gateway (PG) services.

“acquiring bank” means any banking company, financial institution including non-banking financial company or any other person, who makes the payment to any person who accepts such card.

Research and Development Services by Government Entities

• The payment of GST on the supply of research and development services by Government Entities against grants received from the Government Entities is regularized for the period 01.07.2017 to 09.10.2024, on ‘as is where is’ basis which was earlier exempted under Income Tax and GST

Skilling Services under National Skill Development Corporation (NSDC)

• The payment of GST on services provided by Training Partners approved by the National Skill Development Corporation, which were exempt prior to 10.10.2024, is regularized for the period 10.10.2024 to 15.01.2025, on ‘as is where is’ basis.

Regularizing payment of GST on Reverse Charge (RCM) basis on renting of commercial property by unregistered person to a registered person for taxpayers registered under composition levy.

• Payment of GST on Reverse Charge (RCM) basis on renting of immovable property other than residential dwelling (commercial property) by unregistered person to registered person under composition levy is hereby regularized for the period from 10.10.2024 to 15.01.2025 on ‘as is where is’ basis.

Regularizing payment of GST on certain support services provided by an electricity transmission or distribution utility.

• The payment of GST on certain incidental or ancillary services to the supply of transmission or distribution of electricity supplied by an electricity transmission or distribution utility is regularized for the period 10.10.2024 to 15.01.2025, on ‘as is where is’

These clarifications aim to resolve ambiguity in GST applicability on specific scenarios, aligning with GST laws and past notifications.