IN RE : DIVISIONAL FOREST OFFICER, DEHRADUN
GST
2018 (9) TMI 1647 – APPELLATE AUTHORITY FOR ADVANCE RULING, UTTARAKHAND – 2018 (18) G. S. T. L. 566 (App. A. A. R. – GST)
APPELLATE AUTHORITY FOR ADVANCE RULING, UTTARAKHAND – AAAR
Dated:- 7-9-2018
GST ARA 02\/01 – 01\/2018-19
GST
SHRI S.H. HASAN AND SMT. SOWJANYA MEMBER
\nConcerned Officer: Smt. Preeti Manral, Deputy Commissioner, Tax
\nAppellant Represented by: Rajesh Gupta, F.C.A., LLB (Authorised Rep.)
\nORDER
\nBRIEF FACTS OF THE CASE
\n1. In the instant case, an application under Sub-Section (1) of Section 97 of the CGST Act and the rules made thereunder, was filed by Regional Forest Officer (Forest Division, Dehradun) seeking an advance ruling on the question whether GST is leviable on the “Marg Sudharan Shulk” and “Abhivahan ShuIk” said to be charged by Forest Division Dehradun from the non government, private and commercial vehicles engaged in mining work in lieu of use of forest road. The said mining is being und<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n d 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 di<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n HE UTTARAKHAND TRANSIT OF TIMBER AND OTHER FOREST PRODUCE RULES' 2012 as notified by Govt. of Uttarakhand vide notification no. 819\/X-2-2012-21(13)\/2011 dated 18.05.2012. That the said Rules have been notified under Section 41, 42, 45, 51, 52 and 76 of Indian Forest Act' 1927. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged.” There is nothing in the definition which stipulates that even Govt. Fee collected under a specific statue shall also be covered in the definition of service. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n rson in the course or furtherance of business, whereas the appellant is not charging Abhivahan Shulk in furtherance of business, instead the same is charged under the provisions of a Statute and Authority of State Govt that too without any provision of any kind of service instead to regulate the transit of forest produce. That Clause (b) of Subsection (1) of Section 7 deals with import of services therefore the same is not applicable. Further the relevant schedules I, II & III also nowhere stipulate that any Govt. Fee collected under a specific statue shall also be covered in the definition of service. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ed Representative for the appellant on 08.08.2018. During the course of the personal hearing the Authorised Representative reiterated the points covered in the grounds of appeal filed with the Appellate Authority vide Appeal No. GSTARA 02\/01\/18.06.2018. Further, in order to understand the whole issue in minutest details, the Authorised Representative was asked some specific questions in a questionnaire form, the answers of which were submitted on 10.08.2018. The details of the submissions made in the Question Answer form are as under:- = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n be regulated by the relevant conditions of sale and terms of the corresponding agreement deed executed by the buyer = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n TRANSIT OF TIMBER AND OTHER FOREST PRODUCE RULES'2012, which read as under: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n efinition of service. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n to the expenses incurred by Government in rendering the services. In the Secretary, Government of Madras, Home Department v. Zenith Lamp & Electrical Ltd., = 1972 (11) TMI 93 – SUPREME COURT OF INDIA, it was reiterated that the fact that the collections went to the Consolidated Fund was not in itself conclusive though not much stress could be laid on this point because Art. 266 requires that all revenues raised by the State shall form part of the Consolidated Fund.” = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n between the levy and the services rendered\/expected is one of general character and not of mathematical exactitude. All that is necessary is that there should be a “reasonable relationship” between the levy of the fee and the services rendered. There is no generic difference between a tax and a fee. Both are compulsory exactions of money by public authorities. Compulsion lies in the fact that payment is enforceable by law against a person in spite of his unwillingness or want of consent. A levy in the nature of a fee does not cease to be of that character merely because there is an element of compulsion or coerciveness present in it, nor is it a postulate of a fee that it must have direct relation to the actual service rendered by the authority to each individual nor that each should obtain the benefit of the service. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n s within the forest area and the same is collected from all the vehicles, whether loaded or empty. Thus the Marg Sudharan Shulk is used for the benefit of public in general who may use the roads of the forest area and not only to a particular class of people who are paying the said fee. The rates of Abhivahan Shulk, on the other hand, are fixed on the quantity of forest produce being transported. So, a vehicle entering a forest area will have to pay the Marg Sudharan Shulk even if it comes out empty. But the same empty vehicle will not be required to pay any Abhivahan Shulk, if it is coming out of the forest area without any forest produce. Thus, this fee is directly related to the quality and quantity of the forest produce. The Uttarakhand Forest Department is incurring expenses in maintaining the administrative machinery for collection of the Abhivahan Shulk and they are required, by the Uttarakhand Transit of Timber and Other Forest Produce Rules 2012, to construct and maintain depo<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n r a government levy, for it to be termed as 'fee'. The very nature of it being a fee ensures that a quid pro quo has to be there and therefore rendering of some form of service comes in built, which is also established as discussed above. Thus, this shulk collected against the services rendered, is liable to be taxed under the provisions of Goods and Service Tax Acts, unless otherwise exempted. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n nsideration by a person in the course or furtherance of business; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n 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<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n 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. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" IN RE : DIVISIONAL FOREST OFFICER, DEHRADUNGST2018 (9) TMI 1647 – APPELLATE AUTHORITY FOR ADVANCE RULING, UTTARAKHAND – 2018 (18) G. S. T. L. 566 (App. A. A. R. – GST)APPELLATE AUTHORITY FOR ADVANCE RULING, UTTARAKHAND – AAARDated:- 7-9-2018GST ARA 02\/01 – 01\/2018-19GSTSHRI S.H. HASAN AND SMT. SOWJANYA MEMBER Concerned Officer: Smt. Preeti Manral, Deputy … Continue reading “IN RE : DIVISIONAL FOREST OFFICER, DEHRADUN”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-14078","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/14078","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14078"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/14078\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14078"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14078"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14078"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n3. That Section 41 of the Indian Forest Act' 1927 deals with “Power to make rules to regulate transit of forest produce” and clause (b) of subsection (2) of the said section prescribes that State Govt. may “prohibit the import or export or moving of such timber or other produce without a pass from an officer duly authorised to issue the same, or otherwise than in accordance with the conditions of such pass; further clause (c) prescribes that State Govt. may “provide for the issue, production and return of such passes and for the payment of fees therefore”
\n4. That THE UTTARAKHAND TRANSIT OF TIMBER AND OTHER FOREST PRODUCE RULES' 2012, have been formulated to implement the provisions of Indian Forest Act' 1927 an<\/p>\n
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\n7. That under the provisions of GST, Supply is the critical event for Levy and Collection of Tax. The relevant Section 7 – Pertaining to Scope of Supply reads as under:
\n“7. (1) For the purposes of this Act, the expression “supply” includes-
\n (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;
\n (b) import of services for a consideration whether or not in the course or furtherance of business;
\n (c) the activities specified in Schedule I, made or agreed to b<\/p>\n
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\n8. That in terms of the submissions made, the Abhivahan Shulk (Transit Fee) is not exigible to GST and in case such fee is held to be exigible to GST, in such a scenario all Govt. Fees and Levies charged under their specific statues shall become exigible to GST, which is not the intention of legislature, therefore it was prayed that Abhivahan Shulk (Transit Fee) may not be considered ex<\/p>\n
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\nQ1. Please provide the authority for the collection of the Abhivahan Shulk (Transit Fee).
\nAns 1. The said Abhivahan Shulk is collected under the authority granted in terms of THE UTTARAKHAND TRANSIT OF TIMBER AND OTHER FOREST PRODUCE RULES' 2012, which have been formulated to implement the provisions of Indian Forest Act' 1927. A copy of the same has already been submitted during the course of personal hearing.
\nQ2. Since when this fee is collected a<\/p>\n
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\n c. Further transfer of forest produce as may be exempted by the Government from the operation of these rules by notification in the official Gazette.
\nQ4. What is the rate and methodology of collection of this fee? Is there any prescribed tariff? If yes, copy may please be submitted.
\nAns 4. That the fee is payable in terms of Rule 5 of THE UTTARAKHAND TRANSIT OF TIMBER AND OTHER FOREST PRODUCE RULES'2012. A copy of the same has already been submitted during the course of personal hearing.
\nQ5. Under what accounting head is the fee deposited?
\nAns 5. The Fee is Deposited with State Govt. as Govt. Revenue under Code – 0406- 01- 800- 01- 03. A copy of sample challan is enclosed herewith as Annexure-I.
\nQ6. What is the reason for imposition of this fee? How is the gross collection used and by which authority?
\nAns 6. The fee is charged in terms of the authorities gra<\/p>\n
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\n (1) Whosoever contravenes any of the provisions of these rules shall be punishable with imprisonment for a term which may extend to two years pr with fine which may extend to Rs. 10000\/- or with both
\n (2) In cases where the offence is committed after sunset and before sunrise, or after making preparation for resistance to lawful authority or where the offender has been previously convicted of a like offence, the offender shall be liable to imprisonment for a term which may extend to 02 years or a fine which may extend to Rs. 50000\/- but in no case less than Rs. 10000\/- or with both.
\nQ10. Are the forest produce liable to seizure in case the Abhivahan Shulk is not paid? What is the fate of seized goods? Are they subsequently auctioned then is the Abhivahan Shulk recouped from the sales proceeds?
\nAns 10.Yes. That once the produce is detained, the case is placed before the Civil Court and once the orders <\/p>\n
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\n(ii) that Govt fee is not covered under scope of service as detailed in Section 7 (a) & (b).
\n(iii) that in case such fee is held exigible to GST then in such a scenario all Govt. Fees and levies charged under specific statutes shall become exigible to GST, which is not the intention of the legislature;
\n(iv) that the provisions of Notification No. 13\/2017-CT(R) dated 28.06.2017 shall continue to apply and the same shall be payable by the recipient of service under Reverse Charge mechanism. Further the recipient of service shall also be entitled to benefit of exemption as contained in Entry S.No. 9 of notification no. 12\/2017 CT(R) dated 28.06.2017
\nBefore going into the specific details of the issue, the nature of the levy needs to be understood. Hon'ble Supreme Court, in the landmark judgement in the case of State of Rajasthan vs. Sajjan Lal, AIR 1975 (Supreme Court) page 706, (Para 40 and 41) = 1973 (12) TMI 93 – SUPREME COURT OF INDIA, laid down the law r<\/p>\n
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\nThe principles were reiterated in Kishan Lal vs. State of Haryana (1993) Supplement 4 CC page 461 = 1993 (7) TMI 337 – SUPREME COURT OF INDIA – It is trite to reiterate the law laid down by this Court of the distinction between the tax and the fee and its demarcating line visa-vis the power of the legislation to make law for imposition of fee in that behalf. Suffice to reiterate the ratio laid in Sreenivasa General Traders and Ors. v. State of A.P. and Ors. 1983 (9) TMI 315 – SUPREME COURT, that the traditional view that <\/p>\n
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\nFurther, in the case of P. Kannadsan etc. vs. State of Tamilnadu & other etc. J.T. 1996 (7) SC 16 = 1996 (7) TMI 554 – SUPREME COURT OF INDIA. It has been observed that <\/p>\n
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\nNow, we come to the specifics of the appeal. Definition of services as provided in Section 2(102) of the CGST Act 2017, reads as “(102) “services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged;”. Thus, by using the word “anything” the legislation becomes all encompassing with the only exceptions contained in the definition itself. It is not possible to include <\/p>\n
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\n (b) import of services for a consideration whether or not in the course or furtherance of business;
\n (c) the activities specified in Schedule I, made or agreed to be made without a consideration
\n (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II.
\n(2) Notwithstanding anything contained in sub-section (1),
\n (a) activities or transactions specified in Schedule III; or
\n (b) such activities or 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, shall be treated neither as a supply of goods nor a supply of services.
\n(3) Subject to the provisions of sub-sections (1), and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as-\n<\/p>\n
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\nIn view of the above findings we dismiss the appeal and uphold the decision of the Authority on Advance Ruling<\/p>\n
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