GST on Penalty/Fees paid to Govenment Authority

[Haresh Raithatha]

Whether GST is applicable on any Penalty or Charges payable to Regional Transport Office by any entity? If yes then who is liable to pay GST on such Penalty or Fees?

[CASusheel Gupta]

Services provided by government authority up to ₹ 5000/- is exempt,

Above 5000/- falls in RCM

CA Susheel Gupta

9811004443

[KASTURI SETHI]

Also see Para no.5.2 and 6 of the following decision of AAR:-

2018 (18) G.S.T.L. 641 (A.A.R. - GST) = 2018 (10) TMI 346 - AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND IN RE : PUREWAL STONE CRUSHER

[Haresh Raithatha]

Thank You.

AI Summary

GST on penalties may attract reverse charge when not exempt, shifting tax liability to the recipient. Supplies by government authorities may be exempt up to a specified threshold, while amounts beyond that threshold can be taxable under the reverse charge mechanism, shifting the GST liability to the recipient; parties should consult relevant advance rulings for guidance.