Raj Jaggi
Quick Summary
When Regulation Was Mistaken for a Service: The Beginning of a Landmark GST Dispute GST law, despite its wide scope, is built upon a few simple and fundamental principles. One of the most important among them is that not every receipt is taxable, and not every activity amounts to a supply. However,
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FAQ :
No, statutory regulatory functions performed under legal authority cannot be treated as taxable supplies under GST. This was established in a landmark ruling affirmed by the Supreme Court.
No, fees collected by regulatory commissions are considered statutory in nature and not consideration for commercial services. They are collected to enable the discharge of statutory responsibilities, not as payment for a business supply.
The commissions argued they were statutory bodies performing legally assigned duties, not voluntary commercial activities for profit. The fees collected were statutory and not consideration for commercial services, thus GST should not apply.
Schedule III of the CGST Act excludes services by courts or tribunals from being treated as a supply. The courts recognized regulatory commissions as quasi-judicial bodies, placing their functions within this exclusion and outside the scope of GST.
Yes, the Supreme Court's affirmation of the Delhi High Court's ruling provides a guiding precedent that statutory regulation and associated fees are generally not taxable supplies under GST, impacting how similar issues are interpreted for other statutory authorities.
The judgment reinforces that GST applies to business activities and commercial supplies, not to statutory governance. The mere receipt of money does not make an activity taxable; it must be in the course or furtherance of business.
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