Corporation's Penalties for Guideline Breaches Not Subject to GST, Court Rules; No Supply of Goods/Services Found.

HC held that respondent Corporation cannot demand GST from petitioners on penalty imposed for non-attendance of leakage complaint as there was no "supply of goods/services" by Corporation to petitioners. To demand GST, it must be proved that there is "supply of goods/services" by person collecting tax to person from whom tax is recovered. Here, no service was supplied by Corporation to petitioners while imposing penalty. Amounts sought were not for tolerating an act but for not following terms of agreement/guidelines framed by Corporation as deterrent against future breach. Petition dismissed. .....

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