TaxTMI 
TaxTMI 
2021 (5) TMI 39
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....ection of 18% GST as far as the parking areas, more specifically, in these batch of cases by the Southern Railway through their Private Contractors. 3. Section 2 of the CGST Act enumerates definitions. Section 2 (102) defines:- "services" means "anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged; [Explanation : For the removal of doubts, it is hereby clarified that the expression "services" includes facilitating or arranging transactions in securities;]" 4. Let us now consider Chapter III levy and collection of tax. Section 7 denotes the scope of supply, which reads as under:- "7. Scope of supply.-- (1) For the purposes of this Act, the expression 'supply' includes-- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; ....
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.... received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. Explanation.-For the purposes of this clause- (1) the expression 'competent authority' means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely:- (i) an architect registered with the Council of Architecture constituted under the Architects Act, 1972 (20 of 1972); or (ii) a chartered engineer registered with the Institution of Engineers (India); or (iii) a licensed surveyor of the respective local body of the city or town or village or development or planning authority; (2) the expression "construction" includes additions, alterations, replacements or remodelling of any existing civil structure; (c) temporary transfer or permitting the use or enjoyment of any intellectual property right; (d) development, design, programming, customisation, adaptation, upgradation, enhancement, implementatio....
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....ation in GST etc of licensee. Only those licensees who are registered in GST shall be responsible for collection of GST from public and depositing the same to the Government. This issues with the concurrence of Finance Dte. Of Ministry of Railways." 10. Beyond these two Circulars, the Railway Board issued detailed approach paper for implementation of Goods and Services Tax (GST) on the subject of Traffic Commercial Directorate in proceedings No.TCII/ 2910/2017/GST/2 dated 09.06.2017, wherein Clause 3 stipulates renting of space and the same reads as under:- "3. Renting of space-ATM/STDPCO/ Shops/Parking, catering stalls operated by licensee: (i) The place of supply will be the place where space is located and place of supplier (Railways) will also be the same as Railways intend to register in every State for GST. In this case CGST+SGST/UTGST will be applicable. (ii) Zonal Railways shall be issued instructions to issue Money Receipt as tax invoice accordingly and charge applicable GST. (iii) The details of the money receipt shall be fed into the CRIS system for filing of GST return. Generation of tax complaint invoice is manda....
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....voices of the services rendered by them to passengers, etc so that corrective action can be taken. Compliance report in this regard may kindly be sent to Accounts Directorate by 16th August, 2017." 13. Perusal of all the above provisions as well as the consequential Board orders and the clarificatory letters issued by the Chief Commissioner of Central Tax and Customs, it is made clear that license, rental, lease amounts to supply and as per Schedule II of the Act, license to occupy the land and renting of an immovable property, are also supply of services. 14. In the above context, let us consider the facts relating to the writ petitions on hand. 15. It is an admitted fact that all the writ petitioners are Contractors, who were granted license to run parking areas for vehicles in the Railway premises by the Southern Railway. All the writ petitioners participated in the tender process and were successful in the tender and entered into an agreement with the Southern Railway, agreeing certain terms and conditions stipulated. 16. The agreement for manning the vehicle parking stand in Railway Stations were admittedly signed by all the writ petitioners, who all are C....
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....late such payment of 18% CGST/SGST. 20. When there is no provision to collect the GST from the contractors on the license fee, then the terms and conditions of the agreement became null and void and therefore, the conditions imposed in the agreement would not be binding on the contractors. In this regard, the learned counsel for the petitioner relied on Section 32 of the CGST Act and sub-clause (2) to Section 32 stipulates that "no registered person shall collect tax except in accordance with the provision of this Act or the Rules made thereunder". 21. In the present cases, even before the introduction of the present CGST Act, the Contractors were paying the taxes based on the erstwhile Act, mainly Service Tax Act. After the implementation of the CGST Act, when there is prohibition of unauthorised collection of tax, the demand now made by the Southern Railways is in violation of the provisions of the CGST Act and therefore, the writ petitions are to be allowed. 22. One of the contention raised is that presuming that the respondents are entitled to collect GST under RCM, then also they can do it only in the case of services supplied by the Central Government by way of renti....
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.... pay all rates, assessment, outgoings and other taxes as leviable on the licensee in laws. 14. Another responsibility that vested on the licensee was to maintain regular and proper account books along with other supporting documents regarding sales effected by the licensee in the said premises which could be inspected by AAI in such manner as may be prescribed. The licensee was also responsible under the licence agreement to operate the subject facility by charging the rate from users, as may be approved in advance by AAI. 15. Albeit, it is true that the appellant deposits a licence fees of Rs. 2,66,797 per month to AAI but it collects the required fees from the users of the facility and provides all facilities to such customers. Section 65 clause (105)(zzm) of the Finance Act, 1994 defines "taxable service" to mean any person, by Airports Authority or any person authorised by it, in an airport or a civil enclave. It is thus crystal clear that the appellant being a person authorised by AAI to provide service in express terms and conditions, it becomes liable to pay such tax as it was an authorised person to provide taxable service and collect the admission ticket ....
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....aging the visitor's entry, car parking and issue of season tickets and temporary passes, service tax would be chargeable under Section 65(105)(zzm)." 27. Relying on the above said judgments, the learned counsel for the writ petitioners reiterated that what is not contemplated under the provisions of the Act, cannot be permitted to be exercised. When there is a specific bar under the Act, more specifically, under Section 32, there is no reason whatsoever to make a demand for recovery of GST from the writ petitioners. Such a collection of tax is unauthorised and the above judgments clarify that the collection of tax in such circumstances, more specifically, from the licensees are impermissible. 28. In these cases, the respondent-Railways have treated the parking as rented out of property and therefore, the same would not fall under the provisions of the CGST Act and the writ petitioners are not liable to pay the tax. 29. Learned counsel appearing on behalf of the Southern Railways, objected to the said contentions of the learned counsel appearing on behalf of the writ petitioners, by stating that all the agreements and precontract proposals were signed by the writ petiti....
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.... II of Section 7 contemplates 'Land and Building' and accordingly license to occupy the land is a supply of service. Clause 5(a) renting of an immovable property also shall be treated as supply of services. 37. When license to occupy the land and renting of an immovable property, both are considered as supply of services, within the meaning of Section 7(1-A) of the CGST Act, there is no ambiguity in respect of the transactions made with reference to the facts of the present writ petitions. 38. The facts admitted are that the land belongs to the Southern Railways, the writ petitioners were given license to run vehicle parking and while entering into an agreement of license, the Southern Railways, in clear terms, stated that the contractors are liable to pay taxes as applicable under the CGST Act. In turn, the contractors are also liable to pay the service tax, if they are falling within the ceiling prescribed under the Act. Thus, the Railway has to pay tax for the services rendered to the contractors by collecting license fees and the contractors, in turn, have to pay service tax for collection of parking fee from the end users. 39. This being the pattern of liabili....
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....s again of the year 2015. 44. Therefore, all the above mentioned cases were decided prior to implementation of the CGST Act and those cases would not be of any avail to the cases of the present writ petitioners, so as to seek exoneration from payment of tax under Section 32 of the CGST Act. In other words, liability cannot be waived when the provisions of the Act is unambiguous. Thus, the arguments advanced based on the above mentioned judgments, cannot be held in favour of the writ petitioners and this Court is bound to go by the provisions of the CGST Act, which was implemented with effect from 01.07.2017. 45. As discussed above, the provisions of the CGST Act is crystal clear that the services rendered are liable for payment of service tax and more specifically, with reference to Section 7 r/w Schedule II, the services rendered by the Railways to the writ petitioners/contractors and the writ petitioners/contractors to the end users, are falling within the scope of Section 7 r/w Schedule II of the CGST Act and therefore, all the writ petitioners are liable to pay tax, as applicable and as demanded by the Southern Railways. 46. This Apart, the writ petitioners have agreed....