RCM applicability permit fees paid to State Govt.

[KARAN VERMA]

Sir, my query is whether RCM required to be paid on permit fees paid to State Govt. for ethanol sale. Amount for permit fees is ₹ 50 lakhs.

AI Summary

Reverse Charge Mechanism under GST applies to 50 lakh permit fees for ethanol sales; no exemption available. A query was raised regarding the applicability of Reverse Charge Mechanism (RCM) under GST on permit fees of 50 lakhs paid to the State Government for ethanol sales. Several responses were provided. One opinion cited a GST circular indicating that government services to businesses, including permits, are taxable under RCM. Another response suggested that if the fee is statutory without government service, RCM may not apply. Further clarification mentioned that ethanol is taxable under GST, and the permit fee does not fall under any exemption, thus RCM is applicable. A legal case was also referenced to support the applicability of GST on such fees.