Whereas, certain difficulties have arisen in giving effect to the provisions of the Kerala State Goods and Services Tax Act, 2017 (20 of 2017), hereinafter in this order referred to as the said Act, in so far as it relates to the provisions of section 10 of the said Act;

Now, Therefore, in exercise of the powers conferred by section 172 of the said Act, the Government of Kerala, on recommendations of the Council, hereby makes the following Order, namely:-

1. This Order may be called the Kerala State Goods arid Services Tax (Removal of Difficulties) Order, 2017.

2. For the removal of difficulties,-

(i) it is hereby clarified that if a person supplies goods and/or services referred to in clause (b) of paragraph 6 of Schedule II of the said Act and also supplies any exempt services including services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, the said person shall not be ineligible for the composition scheme under section 10 subject to the fulfilment of all other conditions specified therein.

(ii) it is further clarified that in computing his aggregate turnover in order to determine his eligibility for composition scheme, value of supply of any exempt services including services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be taken into account.

By order of the Governor,

Minhaj Alam,

Secretary to Government.

Explanatory Note

(This does not form part of the order, but is intended to indicate its general purport.)

In the current composition scheme under section 10 of the Kerala State Goods and Services Tax Act, 2017 (20 of 2017), if a person was engaged in any supply of services other than the supply of service specified in clause (b) of paragraph 6 of schedule (I of the Apt (restaurant services), he could not opt for composition scheme. Even interest on deposits made in banks is considered as service (though exempted) and therefore, a person receiving interest would be ineligible for composition scheme. In the absence of specific exemption, composition scheme would be completely unavailable to manufacturers and dealers who are providing exempted services, since for computing his aggregate turnover in order to determine his eligibility for composition scheme, value of supply of any exempt services will be included. Hence, to tide over this difficulty and to enable them to opt for composition, order need to be issued as recommended by the 22nd Goods and Services Tax Council.

The order is intended to achieve the above object.