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2018 (5) TMI 647 - AAR - GSTLevy of GST - reinstatement charges paid to Municipal Authorities - to carry out the excavation of roads for laying, repair and maintenance of electric supply lines. - activity related to sovereign function or not - It has been contended that the service falls under entry 4 of Notification No. 12/2017 -Central/State Tax (Rate) dated 28.06.2017 - Whether reinstatement charges paid to Municipal Authorities would be liable to GST? - Held that: - There is specific entry in N/N. 12/2017-Central/State Tax (Rate) dated 28.06.2017 - from Chapter 99, it is very clear that if any services, including the three services excluded in clauses (a) to (c) of the above entry, are provided by the Government or local authority to any business entity, they would not be eligible for any exemption under GST - the applicant has made a whole lot of arguments to hold that the recovering of charges for the restoration of the street or pavements amounts to a service activity in relation to a function entrusted to a municipality under article 243 W of the Constitution. However, we find that the arguments fail to make a point. There is no other entry in the Schedule contained in the N/N. 12/2017-Central/State Tax (Rate) for services exempted from GST which would cover the impugned transaction. Neither is a specific entry for the impugned transaction in the N/N. 11/2017-CentraI/State Tax (Rate) for services taxable to GST at various rates. In view thereof, the residuary entry no.35 of the N/N. 11/2017-Central/State Tax (Rate) covering “ services nowhere else classified” and attracting GST @18% [9% each of CGST and MGST] would be applicable. Levy of GST - whether access charges paid to Municipal Authorities would be liable to GST? - Held that: - The reinstatement charges apply towards restoration of excavation work on the roads carried out by the various business entities providing services such as gas, telephone, electricity, etc. The Guidelines for Trenching activity-2015 [No:AMC/ES/7725/11 Dated 18.12.2014 - policy guidelines for granting trench excavation permissions to underground service provider Utility agencies and Municipal agencies & the reinstatement of trenches] as provided by the applicant state that in addition to the regular RI charges, access charges for right of way will be recovered by MCGM from all utilities which lay underground services below MCGM roads - This statement helps to understand the position as respects MCGM [Municipal Corporation of Greater Mumbai]. That these charges would be exigible to GST is not doubtful even to the applicant and we agree with the same. To determine whether it is a composite supply by Municipal Authorities, the available information is insufficient as the question posed is in respect of Municipal authorities in general and not any specific Municipal Authority with complete details and therefore is not answered. Both the questions are answered in affirmative.
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