GST RCM on Government Fees

[nilesh nerkar]

Dear Sir/Madam,

Please help regarding GST RCM on Government Fees.

If possible, Please provide List of Government Fees on which RCM applicable.

&

Please give suggestion on :-

Q1. GST RCM is applicable on ROC Challan Fees?

Q2. GST RCM is applicable on Property Tax?

Q3. GST RCM is applicable on RTO Tax?

Q4. GST RCM is applicable on Maharashtra Pollution Control Board Sample collection fees?

Q5. GST RCM is applicable on Franking Fees?

Q6. GST RCM is applicable on Factory License Renewal?

Thanks,

Nilesh.

Mob. 9921840848.

[KASTURI SETHI]

Query-wise reply is as under:-

1.No.

2.No.

3.No

4.Elaborate the query. Samples of what and purpose of sample ?

5. Elaborate. By whom charged for what purpose.

6. No

[nilesh nerkar]

Dear Sir,

Thanks a lot for Reply

Please read clarification & reply the same

Q4. GST RCM is applicable on Maharashtra Pollution Control Board Sample collection fees?

Q4 reply . Elaborate the query. Samples of what and purpose of sample ? –

Clarification

Our firm is Pharmaceutical Manufacturing, Samples are collected from ETP Water & MPCB collect this sample for testing purpose.

In this matter my question is - MPCB is regulatory bodies this is working for public health, in Service Tax Law this type of Government service was exempted for RCM but in GST not clearly notified the same. please suggest

Q5. GST RCM is applicable on Franking Fees?

Q-5. Elaborate. By whom charged for what purpose.

Clarification

Charged by Authorised co.op bank, this is like Franking on paper like bond or agreement instead of printing on stamp paper.

&

If possible, Please provide List of Government Fees on which RCM applicable

[KASTURI SETHI]

Reply to Question No.4 & 5: RCM is not applicable to both supplies of services.

In all the above queries what is worthwhile is "Whether GST is leviable or not ?" Statutory functions are out of GST. These are neither supply of goods nor supply of services and are covered under Schedule III (Serial No.3(a), (b) &(c) of Section 7 of CGST Act, 2017. For example ; Issuance of driving licence, issuance of NOC, issuance of birth certificate, issuance of marriage certificate, issuance of vehicle registration certificate, issuance of voter's card, issuance of Aadhar card etc. These are statutory functions//activities and if, any fee is charged that will not be considered as supply of service. Otherwise also all the above functions are not in the course of business or furtherance of business. No specifically mentioned. One has to be careful to arrive at the conclusion whether any activity/function conforms to 'statutory or sovereign' function or not. What is a statutory function or fee can be best understood from the following Board's circular (pertaining to pre-GST era ):-

Public Authorities - Service tax on fee collected by Public Authorities - Clarifications

Circular No. 89/7/2006-S.T., dated 18-12-2006

Circular No. 192/02/2016-S.T., dated 13-4-2016

 

[DR.MARIAPPAN GOVINDARAJAN]

In my view RCM is not applicable to all the cases you have mentioned.

[Vishakha Mahajan]

Respected Experts

Please provide detailed clarification in "Q6-GST RCM is applicable on Factory License Renewal?" that why RCM is not applicable in this case.

[KASTURI SETHI]

Pl. see replies posted against Issue ID No.115563 dated 21.10.19. (Serial No.4 to 7).

AI Summary

Reverse Charge Mechanism limited where fees arise from statutory or sovereign functions and are outside taxable supply under GST.
RCM does not apply to the queried government and regulatory fees because many such charges are statutory or sovereign functions excluded from supply under Section 7 and Schedule III; specific items-ROC challan fees, property tax, RTO tax, MPCB sample-collection fees, franking charges, and factory licence renewal-were advised as not subject to RCM, with a caution to examine the precise nature and purpose of any fee to confirm it is a statutory function and thus outside GST.