Would GST be applicable on the portion of statutory levy charged by Automated Testing Station (ATS) for grant of fitness certificate to vehicles ? Also RCM applicable thereto.

[Gautam Godhwani]

The ATS does not accept the full payment of the statutory levy as prescribed in the Motor Vehicle Rules. First the vehicle owner goes to the ATS, makes partial payment and gets an acknowledgement - then goes to the RTO which makes invoice on the full amount but the vehicle owner need pay only the remaining amount.

After this the vehicle owner takes the receipt back to the ATS or fitness center, which then provides the fitness certificate.

Lets say the statutory levy for heavy vehicle is Rs 1000 and the ATS takes part payment of Rs 400. Would GST be payable on this Rs 400 ?

Also, would the vehicle owner be liable to pay RCM on the entire Rs 1000 ?

AI Summary

Taxability of fitness certificate: GST applies and reverse charge may arise when the recipient is a business entity.
Issuance of a motor vehicle fitness certificate by ATS is a supply of service subject to GST; the statutory fee charged is consideration. If the recipient is a business entity the service is within the reverse charge mechanism as notified, unless a specific exemption applies-such as exemptions for certain government services, recipient categories, or where the consideration falls below the small-amount threshold. An alternative argument invoking testing/certification or small-amount exemption was noted but not accepted in the primary analysis.