Levy of GST—GST on “AbhivahanShulk”: The Advance ruling authority found that the said “Abhivahan Shulk” is charged and collected by applicant in respect of forest produce carried out by a person. Ongoing through “The Uttrakhand Transit of Timber and Other Forest Produce Rules 2012”, the authority observed that a person who desires to obtain forest produce is required to be registered with the forest department after paying applicable fee and the said “Abhivahan Shulk” is charged on the basis of quantum and quality of forest produce and the said forest produce must be accompanied with a transit pass issued by forest authorities in this regard. It was further observed that charges for carrying forest produce through road or water are different and determined according to quality and quantity. Therefore, said “Abhivahan Shulk” cannot be termed as toll tax and rather is a form of consideration received by the applicant in lieu of services provided to the person for carrying forest produce. Under Section 2(102) of GST Act, services means anything other than goods. .....and all services but for list of exempted services as provided under Chapter 99 of GST Tariff, 2017 are liable for GST. Since the services provided by the applicant did not find mention in the list of exempted services, therefore the applicant was liable to pay GST @ 18% on the said “Abhivahan Shulk” under Service Code 9997 and was to be treated as “other services”
Held that :- A plain reading of the above statute clearly shows that sub-clause (2) is the exclusion clause and only goods or service falling under the Schedule III (clause a) or being included in any exception notification (clause b), will not be treated as supply of goods or supply of services. Everything and anything other than those covered by sub clause (2) (a) & (b) are to be treated as supply of goods or supply of services as covered by Schedule I or Schedule II in terms of sub-clause (1)(c) and (1)(d) respectively. Government fees are not specified in Schedule III of Section 7 and Abhivahan Shulk is also not covered by any notification for exception in terms of Section 7(2)(b) ibid. Hence, there remains no ambiguity about the taxability of Abhivahan Shulk.
Now coming to the issue of classification and tax rate, we find that only such activities and transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council are not supply. Abhivahan Shulk is not covered under SI. No. 4 of the notification No. 12/2017-CT (R) dated 28.06.2017 since the entry applies to functions entrusted to Municipalities. Similarly serial entry no. 5 of the said notification relates to functions entrusted to Panchayat. On the other hand, Serial no. 6 of the said notification states that Services by the Central Government, State Government, Union territory or local authority excluding the following services- (a)……... (b)…….. (c)………(d) any service, other than services covered under entries (a) to (c) above, provided to business entities are to be taxed at ‘NIL’ rates. Abhivahan Shulk does not fall under exclusion clauses (a) to (c) and hence they are to be treated as any service provided to a business entity, as per clause (d) and accordingly the fee does not fall under the category of ‘NIL’ rate. The Heading number 9997 at entry serial no. 35 of Notification no. 11/2017-Central Tax (Rate) dated 28.06.2017 reads - Other services (washing, cleaning and dyeing services; beauty and physical well-being services: and other miscellaneous services including services nowhere else classified) with the CGST rate of 9% [The corresponding entry in notification no. 08/2017-lntegrated Tax (Rates) dated 28.06.2017 having IGST rate of 18%]. This entry serial is the residuary entry which covers all other services which are not elsewhere specified. As discussed above, the Abhivahan Shulk cannot be covered under notification relating to “NIL” rate nor does it correspond to any entry for services that are taxed at 24%. Hence, this fee has to be covered under the residuary Heading 9997 for other services with the tax rate of CGST@ 9%, and IGST @ 18%.
As to the alternate plea of the Appellant regarding payment or GST by the recipients, on reverse charge basis, we find that this plea did not form a part or the original application that was filed before the AAR and the issue was not examined by the original Authority on Advance Ruling and accordingly no orders to this effect was passed. Advance Ruling was sought only to decide the exigibility of Abhivahan Shulk. The Reverse Charge mechanism is governed by certain laid down conditions and criteria. In absence of specific details, it is impossible to arrive at a reasoned decision. Hence we cannot consider the issue at the appellate stage without it forming a pan of the order in original. However, the rules and procedures regarding reverse charge mechanism are unambiguously laid down and in the era of self assessment procedure, it is for the assessee to ascertain whether he fulfils the terms and conditions governing payment of GST on reverse charge.
In view of the above findings we dismiss the appeal and uphold the decision of the Authority on Advance Ruling for the State of Uttarakhand. [2018] 4 TAXLOK.COM 101 (AAAR-Uttarakhand)