Whether the authorities were right in demanding G.S.T. on the monthly license fee paid by the petitioner?

Whether the authorities were right in demanding G.S.T. on the monthly license fee paid by the petitioner?

The Andhra Pradesh High Court, Justices C Praveen Kumar and A.V Ravindra Babu, held that demand of GST on monthly license fee paid by the petitioner for the work contract of maintenance of public toilets at bus station is illegal and improper.

Facts of the Case

The petitioner was awarded contracts of cleaning toilets in different bus stations under respondent No.2. The petitioner is punctual in paying rents including 18% G.S.T. i.e., 9% Central G.S.T. and 9% A.P. State G.S.T., as demanded by the respondents. While things stood thus, the Government of India, Ministry of Finance (Department of Revenue), through its Notification No.12/2017-Central Tax (Rate), dated 28.06.2017, exempted G.S.T. for the service under Heading 9994, serial No.76, which refers to “Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets.” Similar exemption was granted by the State of Andhra Pradesh through G.O.Ms.No.588, Revenue (Commercial Taxes-II) Department, dated 12.12.2017. Since the demand notice issued on 10.06.2022 refers to demand of G.S.T. in spite of the notifications issued above, the present writ petition came to be filed.

Sri Sreekanth Reddy Ambati, learned counsel for the petitioner, mainly submits that in view of Notification No.12/2017-Central Tax (Rate), dated 28.06.2017, issued by the Government of India and G.O.Ms.No.588, dated 12.12.2017, issued by the Government of Andhra Pradesh, the petitioner is exempted from payment of G.S.T.

The same is strongly opposed by Sri S.A.V. Sai Kumar, learned Assistant Government Pleader representing Sri Y. N. Vivekananda, learned Government Pleader for Commercial Tax appearing for respondent No.5, stating that the notifications relied upon by the petitioner do not apply to the case on hand.

Court Held

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, we feel that the writ petition deserves to be allowed. Accordingly, 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.

Analysis of the Judgement

By noticing the above order we analyse that G.S.T is exempt on cleaning and Maintenance of toilets at Bus Stations.

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