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Whether exempted Service

Rajib Saha (Accounts Officer) (239 Points)

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).

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3 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 30 November 2021

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

Rajib Saha (Accounts Officer) (239 Points)
Replied 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) (4515 Points)
Replied 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.