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2022 (6) TMI 418 - AAR - GSTLevy of GST - forest permit fee - reverse charge mechanism - can services received by the Applicant be classifiable under heading 9973 of Notification No. 11/2017 Central Tax (Rate) dated 28th June, 2017 and thus be exigible to a lower rate of tax for the period prior to 01-01-2019? - HELD THAT:- The coal mines operated by the applicant are situated in the forest area and under rule 3 of the State Forest produce transit rules, no forest produce shall be moved into or from within the State by land or water. Such movement is permitted only when the person moving the produce obtains a forest permit by paying a fee which in the instant case is Rs. 10 per ton of coal transported - Further the contravention or violation of State Forest produce Transit rules will attract penalty under Sections 20 and 29 of A.P. Forest Act, 1967. Thus transporting coal through forest area without obtaining a forest transit permit and paying the transit fee is punishable under Section 20 (4) of the Forest Act. Penalties are fixed for breach of the provisions of the Rules. The transit fee is the amount of consideration for tolerating an act or a situation arising out of the legal obligation during the transport of the mineral through a forest area. The facts of the present case clearly reveal that the forest department is collecting transit fee to allow the transit of vehicles carrying coal through the forest area, thus this is covered under entry 5(e) of the Schedule II to the CGST Act, 2017 wherein ‘to do an act’ is deemed to be a service. Forest department’s act of allowing such vehicles through forest area is therefore covered under this head. Further these services are not classifiable under heading ‘9973’ of Notification No. 11/2017 as the same relate to ‘Leasing or rental services without an operator’ whereas the present service relates to Entry 5(e) of the Schedule II to the CGST Act, 2017. The consideration received is taxable on reverse charge basis vide the service entry at Serial No. 5 of Notification No. 13/2017 dated: 28.06.2017 - The supply is to be clarified as tolerating to do an act and is to be treated as service as per entry 5(e) of the schedule II to the CGST Act, 2017.
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