Whether exempted Service

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Rajib Saha

Accounts Officer

167 Points Posted on 30 November 2021

Sir/Madam,

A Co-operative Society obtained License from Kolkata Municipal Corporation (KMC) to collect Car Parking Fees from Licensed Area ( Parking Lots) strictly as per rate fixed by KMC- The Licensee can not collect no extra amount in any way. This is clearly stated in the possession certificate issued by KMC periodically. Service Provider, in fact, is the KMC- since it maintains Parking Lots. KMC gives license to collect parking fees under a Scheme upon payment of License Fee.

The question is whether the Licensee is required to get registered under GST. If so, who will bear the burden of GST?

Present rate of Parking Fees, as specified by KMC, is= Rs. 10/- per hour per car ( four wheeler).

Replies (3)

Quick Summary

This discussion explores whether a co-operative society, licensed by Kolkata Municipal Corporation (KMC) to collect car parking fees, needs to register for GST. The core issue is that the licensee cannot charge more than the KMC-fixed rate, making it difficult to cover expenses and pay GST. The query asks if this activity could be exempt, similar to toll plazas, and who ultimately bears the GST burden, given KMC is considered the primary service provider.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 30 November 2021

Yes. GST at 18% is required to be charged by the licensee, and pay it to treasury.

Rajib Saha

Accounts Officer

167 Points Posted on 01 December 2021

Sir,

But, Licensee can not charge, as per KMC order, any extra money from the vehicle owners- other than the stipulated Parking Fees. Licensee finds it difficult to pay the License Fees to KMC. Margin is too little to cover salary and other administrative expenses. In such a situation, who will bear the burden of GST ? Can such parking activities be exempted like Toll Plaza , although Toll Plaza has the right to enhance Toll Charges. Here, the parking licensees are not allowed to enhance the parking fees.

Actually, Kolkata Municipal Corporation is the Service Provider- make arrangement for Parking Lots , maintain those Parking Lots by giving lighting , sewerage etc. Co-op Societies ( the Licensee) acts as Collector on behalf of the Kolkata Municipal Corporation.

Submitted for your valued opinion.

CA Akshay Hiregange

Partner - Audit & Assistance

3708 Points Posted on 02 December 2021

Verify if activity can cover under any of the exemptions under notification 12/2017-CT(R). As the recipient of service is KMC (govt. related entity). Having lesser margin is a business decision and does not impact the GST law.