Levy of GST— 

The applicant filed an appeal before the lower authority seeking advance ruling on the following questions.

(1) Whether, in the facts and circumstances of the case, the Applicant is obliged to pay GST on the forest permit fee paid by it under reverse charge mechanism?

(2) Alternatively, if GST is payable on forest permit fee paid by the Applicant, can services received by the Applicant be classifiable under heading 9973 of Notification No. 11/2017 Central Tax (Rate) dated 28th June, 2017 and thus be exigible to a lower rate of tax for the period prior to 01-01-2019?

Lower authority held that GST is payable on forest permit fee on reverse charge basis. The supply is to be classified as tolerating to do an act as discussed above and is to be treated as service as per entry 5(e) of the schedule II to the CGST Act, 2017.

The permit charges collected by forest department is used by the forest officials keep a watch on the mining activity and also to assess the quantity and type of mineral being quarried to carry out survey and also keep constant watch on the movement of the produce , and is not related to Social forestry or farm forestry. Hence, the contention of the applicant that the service provided is in relation to Farm Forestry and social forestry and is exempted from tax as per notification no 12/2017 is untenable.

Held that— Yes, it is treated as a supply of services and GST is payable on forest permit fee on reverse charge basis.

The supply is to be classified as Public Administrative Services falling under Entry 29 of Notification No: 11/2017 Dt: 28-06-2017, which is taxable @ 18%, for the entire period.