TaxTMI 
TaxTMI 
Metropolitan development authority is collecting development charges like Lay out permission charges, building permission charges, change of land use charges from the customers. The above athority is created by an act of state government and according to PAN it is a local authority. In this regard PL clarify whether the above authority is liable to pay service tax on development charges mentioned above and on legal services, rent a cab service, security service and works contract service under RCM.
Reverse charge mechanism
02 Jun 2020 
3 Replies 
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Reverse charge: registration status of development authorities determines whether GST is payable by the authority or the supplier.
Determination of liability under the reverse charge mechanism turns on whether the metropolitan development authority is registered as a taxable person under the CGST Act; if registered it may be liable to pay GST under reverse charge, otherwise the supplier remains liable. The statutory definition of local authority is specific and developmental authorities formed under Town and Planning Acts may not qualify as local authorities for GST, affecting whether forward or reverse charge applies to development charges and related services. (AI Summary)
Determination of liability under the reverse charge mechanism turns on whether the metropolitan development authority is registered as a taxable person under the CGST Act; if registered it may be liable to pay GST under reverse charge, otherwise the supplier remains liable. The statutory definition of local authority is specific and developmental authorities formed under Town and Planning Acts may not qualify as local authorities for GST, affecting whether forward or reverse charge applies to development charges and related services. (AI Summary)