GST exemption for public convenience services barred tax demand on toilet maintenance licence fee

GST could not be levied on the monthly licence fee for maintenance of toilets at a bus station because the service fell within Heading 9994, covering public conveniences such as bathrooms, washrooms, lavatories, urinals and toilets. The applicable central notification prescribed a nil rate, and a corresponding State exemption was also in force. As no later notification overriding these exemptions was shown, the demand of GST on the licence fee was unsustainable and was set aside.

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Issues: Whether GST was payable on the monthly licence fee charged for the work contract for maintenance of toilets at the bus station, in view of the exemption notifications covering services by way of public conveniences.

Analysis: The service in question fell within Heading 9994 relating to services by way of public conveniences such as bathroom, washroom, lavatory, urinal or toilets, for which the central notification prescribed a nil rate. A similar exemption was also issued by the State Government. As both notifications remained in force and no later notification was shown to have overridden them, the demand of GST on the monthly licence fee could not be sustained.

Conclusion: The GST demand on the monthly licence fee was illegal and improper, and the issue was answered in favour of the petitioner.

Final Conclusion: The writ petition was allowed and the impugned tax demand was set aside.

Ratio Decidendi: Where a service squarely falls within an operative exemption notification prescribing nil tax, and no subsequent overriding notification exists, tax cannot be demanded on that service.

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