2022 (9) TMI 728 - HC - GST

Benefit of exemption from GST - monthly license fee paid by the petitioner - work contract of maintenance of toilets at 4th Respondent Bus Station - eligibility for exemption under N/N. 12/2017-Central Tax (Rate), dated 28.06.2017 - HELD THAT - A perusal of the Notification, dated 28.06.2017, (Notification No.12/2017-Central Tax (Rate), would show that Heading 9994 relates to Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets and the rate of tax against the said heading is shown as nil . Similarly, the Government of Andhra Pradesh, vide G.O.Ms.No.588, dated 12.12.2017, issued similar notification exempting payment of tax for the services rendered by such Agency. As these two notifications are still in force and no notification is issued modifying or overriding the same, the writ petition deserves to be allowed. This Writ Petition is allowed, declaring the action of the respondents in demanding C.G.S.T. and A.P.G.S.T. at the rate of 9% each on the monthly license fee paid by the petitioner for the work contract of maintenance of toilets at respondent No.4 bus station as illegal and improper.

Summary

Issues:
1. Whether demanding GST on the monthly license fee paid by the petitioner is legal?

Analysis:
The petitioner filed a Writ Petition under Article 226 of the Constitution of India seeking relief against the demand of Central GST and AP GST of 9% each, totaling 18% on the monthly license fee collected for the maintenance of toilets at a bus station. The petitioner argued that the demand was contrary to exemptions granted by the Government of India and the State of Andhra Pradesh through specific notifications. The Government Pleader for Commercial Tax opposed this, claiming the notifications did not apply. Despite no counters being filed, the court examined the relevant notifications - Notification No.12/2017-Central Tax (Rate) and G.O.Ms.No.588 - both exempting GST for services related to public conveniences. The court found that these notifications were still in force and no modifications were issued, leading to the decision that the writ petition deserved to be allowed.

The court, per Justice C. Praveen Kumar, allowed the Writ Petition, declaring the demand of CGST and APGST at 9% each on the monthly license fee as illegal and improper. The court emphasized that as the notifications exempting GST for services related to public conveniences were still valid, the demand made by the respondents was not justified. The judgment concluded that there shall be no order as to costs, and any pending miscellaneous petitions in this Writ Petition would stand closed.

This judgment highlights the importance of adhering to specific notifications and exemptions granted by the government in matters related to taxation. It underscores the need for authorities to align their actions with the legal provisions and notifications in force to ensure compliance and avoid arbitrary demands.