Court rules Market Committee parking services not exempt under GST; fall under Heading 9967.

The court ruled that the parking services provided by the contractor appointed by the Market Committee are not exempt under Notification No. 12/2017 as the Market Committee does not qualify as a Government Authority. The parking services fall under Heading 9967 and are subject to GST at the rate of 18% (CGST 9% + SGST 9%).

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Issues Involved:
1. Whether the Market Committee qualifies as a Government Authority.
2. Whether the parking lot services provided by the contractor are exempt under Notification No. 12/2017.
3. Classification and taxability of parking lot services under GST.

Issue-wise Detailed Analysis:

1. Whether the Market Committee qualifies as a Government Authority:

The applicant contended that the Market Committee is a Government Authority as per clause (zf) of Notification No. 12/2017, which defines a Governmental Authority as an authority or board set up by an Act of Parliament or State Legislature or established by any Government with 90% or more participation by way of equity or control, to carry out any function entrusted to a Municipality under Article 243W of the Constitution.

The Punjab State Agricultural Marketing Board (PSAMB) was established under the Punjab Agricultural Produce Markets Act, 1961, to control and supervise the marketing network of agricultural produce. The primary object of the Punjab Mandi Board and Market Committees is to establish modern markets for efficient marketing of agricultural produce and enforce the provisions of the Act, Rules, and Bye-laws framed thereunder.

However, the functions of the Mandi Board do not align with the functions entrusted to a Municipality under Article 243W of the Constitution, which include urban planning, regulation of land use, construction of buildings, and provision of urban amenities such as parks, gardens, playgrounds, and parking lots.

The Mandi Board is not established by the State Government for providing parking lot services, and its functions are not considered sovereign functions. Therefore, the Mandi Board does not qualify as a Government Authority under the definition provided in clause 2(zf) of Notification No. 12/2017.

2. Whether the parking lot services provided by the contractor are exempt under Notification No. 12/2017:

The applicant argued that the parking lot services provided by the contractor appointed by the Market Committee should be exempt under Notification No. 12/2017, as they are covered under Article 243W of the Constitution and the services provided by a Governmental Authority in relation to any function entrusted to a Municipality are NIL rated.

However, since the Mandi Board does not qualify as a Government Authority, the parking lot services provided by the contractor are not exempt under Notification No. 12/2017. The parking fees collected by the Market Committee from the people entering their premises do not fall under the definition of sovereign functions and are not considered statutory fees.

3. Classification and taxability of parking lot services under GST:

The parking lot services provided by the applicant fall under Heading 9967 (Supporting services in transport), specifically under Service Code 996743 (Parking lot services). According to Notification No. 11/2017-Central Tax (Rate), the taxable services under this heading attract GST at the rate of 18% (CGST 9% + SGST 9%).

RULING:

The parking services provided by the contractor appointed by the Market Committee are not exempt under Notification No. 12/2017, as the Market Committee is not a Government Authority. The activity/services of parking provided by the applicant fall under Heading 9967 and attract GST at the rate of 18% (CGST 9% + SGST 9%).

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