TMI Blog2018 (9) TMI 1647X X X X Extracts X X X X X X X X Extracts X X X X ..... n Shulk(transit fee) is different from the Marg Sudharan Shulk (both of which are collected by the forest department under statute of State Government) in as much as the latter is collected for the upkeep and maintenance of roads within the forest area and the same is collected from all the vehicles, whether loaded or empty. Thus the Marg Sudharan Shulk is used for the benefit of public in general who may use the roads of the forest area and not only to a particular class of people who are paying the said fee. The rates of Abhivahan Shulk, on the other hand, are fixed on the quantity of forest produce being transported. A vehicle entering a forest area will have to pay the Marg Sudharan Shulk even if it comes out empty. But the same empty vehicle will not be required to pay any Abhivahan Shulk, if it is coming out of the forest area without any forest produce. Thus, this fee is directly related to the quality and quantity of the forest produce. Abhivahan Shulk fulfills all the criteria, which are required to be established for a government levy, for it to be termed as ‘fee’. The very nature of it being a fee ensures that a quid pro quo has to be there and therefore rendering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er having gone through the merits of the applicability of GST on Marg Sudharan Shulk , which was being charged and collected by applicant for the maintenance of forest road, from non government, private and commercial vehicles engaged in mining work in lieu of use of forest road, the Advance Ruling Authority while holding that Under GST, the services by way of access to a road or a bridge on payment of toll charges were included in the list of exempted services, ruled that no GST was leviable on Marg Sudharan Shulk . 1.3. GST on AbhivahanShulk : The Advance ruling authority found that the said Abhivahan Shulk is charged and collected by applicant in respect of forest produce carried out by a person. Ongoing through The Uttrakhand Transit of Timber and Other Forest Produce Rules 2012 , the authority observed that a person who desires to obtain forest produce is required to be registered with the forest department after paying applicable fee and the said Abhivahan Shulk is charged on the basis of quantum and quality of forest produce and the said forest produce must be accompanied with a transit pass issued by forest authorities in this regard. It was further observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passes and for the payment of fees therefore 4. That THE UTTARAKHAND TRANSIT OF TIMBER AND OTHER FOREST PRODUCE RULES 2012 , have been formulated to implement the provisions of Indian Forest Act 1927 and Chapter II of the said Rules deal with Transit of Timber and other Forest Produce by Land and Rule 3 which pertains to Regulation of Transit of Forest Produce by Means of Permit , provides that No forest produce shall be moved into, or from, or within the State of Uttarakhand except as hereinafter provided, without a transit pass in the form Schedule A to these rules...... .Further Rule 5 which deals with Fee Payable for Different classes of Passes prescribes the system of issuance of passes and fee payable for the same. 5. Thus, in terms of the above, it stands well established that the Abhivahan Shulk (Transit Fee) is charged under Authority of Law and not for provision of any service. 6. That for determination that a particular sum received is exigible to GST or not, first of all the definition of Service needs to be considered. The same as per Section 2(102) stands as : services means anything other than goods, money and securities but includes act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Subsection (1) of Section 7 deals with import of services therefore the same is not applicable. Further the relevant schedules I, II III also nowhere stipulate that any Govt. Fee collected under a specific statue shall also be covered in the definition of service. 8. That in terms of the submissions made, the Abhivahan Shulk (Transit Fee) is not exigible to GST and in case such fee is held to be exigible to GST, in such a scenario all Govt. Fees and Levies charged under their specific statues shall become exigible to GST, which is not the intention of legislature, therefore it was prayed that Abhivahan Shulk (Transit Fee) may not be considered exigible to GST. That without prejudice to the submissions made hereinabove, it was further pleaded that if it was deemed that the Abhivahan Shulk (Transit Fee) charged by the appellant is for rendering service and is exigible to GST, the provisions of Notification No. 13/2017-CT(R) dated 28.06.2017 shall continue to apply and in terms of entry S.No. 5, GST, if any applicable, on the said Abhivahan Shulk (Transit Fee), shall be payable by the recipient of service under Reverse Charge and not appellant as held by the Authority for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer of forest produce by contractor s agency from the forests managed by the Forest Department, in which case the movement shall be regulated by the relevant conditions of sale and terms of the corresponding agreement deed executed by the buyer c. Further transfer of forest produce as may be exempted by the Government from the operation of these rules by notification in the official Gazette. Q4. What is the rate and methodology of collection of this fee? Is there any prescribed tariff? If yes, copy may please be submitted. Ans 4. That the fee is payable in terms of Rule 5 of THE UTTARAKHAND TRANSIT OF TIMBER AND OTHER FOREST PRODUCE RULES 2012. A copy of the same has already been submitted during the course of personal hearing. Q5. Under what accounting head is the fee deposited? Ans 5. The Fee is Deposited with State Govt. as Govt. Revenue under Code - 0406- 01- 800- 01- 03. A copy of sample challan is enclosed herewith as Annexure-I. Q6. What is the reason for imposition of this fee? How is the gross collection used and by which authority? Ans 6. The fee is charged in terms of the authorities granted under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posited whether with treasury or any department? Ans 12. The Gross Collection of Abhivahan Shulk is deposited with State Govt. as Govt. Revenue. A sample copy of challan is already enclosed as Annexure- I DISCUSSIONS FINDINGS We have carefully gone through the order of the Authority on Advance Ruling dated 20.04.2018, appeal submissions, oral as well as written, by the appellant and relevant records. The main issues of contention, on taxability of Abhivahan Shulk, raised by the appellant against the Advance Ruling order inter alia, are- (i) that there is nothing in the definition which stipulates that even Govt. Fee collected under a specific statue shall also be covered in the definition of service. (ii) that Govt fee is not covered under scope of service as detailed in Section 7 (a) (b). (iii) that in case such fee is held exigible to GST then in such a scenario all Govt. Fees and levies charged under specific statutes shall become exigible to GST, which is not the intention of the legislature; (iv) that the provisions of Notification No. 13/2017-CT(R) dated 28.06.2017 shall continue to apply and the same shall be payable by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erate the ratio laid in Sreenivasa General Traders and Ors. v. State of A.P. and Ors. 1983 (9) TMI 315 - SUPREME COURT , that the traditional view that there must be actual quid pro quo for a fee has undergone a sea change. The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is for payment of a specific benefit or privilege although the special advantage is secondary to the primary purpose of regulation in public interest, if the element of revenue for general purpose of the State predominates the levy becomes a tax. In regard to fee, there is, and must always be, correlation between the fee collected and the service intended to be rendered. In determining whether a levy is a fee, the true test must be whether its primary and essential purpose is to render specific services to a specified area or class; it may be of no consequence that the State may ultimately and indirectly be benefited by it. The power of any legislature to levy a fee is conditioned by the fact that it must be by and large a quid pro quo for the services rendered. However, co-relationship between the levy and the services rendered/ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est area will have to pay the Marg Sudharan Shulk even if it comes out empty. But the same empty vehicle will not be required to pay any Abhivahan Shulk, if it is coming out of the forest area without any forest produce. Thus, this fee is directly related to the quality and quantity of the forest produce. The Uttarakhand Forest Department is incurring expenses in maintaining the administrative machinery for collection of the Abhivahan Shulk and they are required, by the Uttarakhand Transit of Timber and Other Forest Produce Rules 2012, to construct and maintain depots. All these expenses appear to be met up from the collection in the form of Abhivahan Shulk and the fact that this fee is deposited in the consolidated general head does not in any way change its character of being a fee. In return for this fee, the forest department is providing the service of maintaining and regulating the forest produce and ensuring the continued availability of the forest produce and its safe transit through the jurisdiction of forest department. These services are restricted only to the persons who are carrying the forest produce and have paid the Abhivahan Shulk. Thus, only a particular class of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business; (c) the activities specified in Schedule I, made or agreed to be made without a consideration (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II. (2) Notwithstanding anything contained in sub-section (1), (a) activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services. (3) Subject to the provisions of sub-sections (1), and (2), the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as- (a) a supply of goods and not as a supply of services; or (b) a supply of services and not as a supply of goods. A plain reading of the above statute clearly shows that su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices which are not elsewhere specified. As discussed above, the Abhivahan Shulk cannot be covered under notification relating to NIL rate nor does it correspond to any entry for services that are taxed at 24%. Hence, this fee has to be covered under the residuary Heading 9997 for other services with the tax rate of CGST@ 9%, and IGST @ 18%. As to the alternate plea of the Appellant regarding payment or GST by the recipients, on reverse charge basis, we find that this plea did not form a part or the original application that was filed before the AAR and the issue was not examined by the original Authority on Advance Ruling and accordingly no orders to this effect was passed. Advance Ruling was sought only to decide the exigibility of Abhivahan Shulk. The Reverse Charge mechanism is governed by certain laid down conditions and criteria. In absence of specific details, it is impossible to arrive at a reasoned decision. Hence we cannot consider the issue at the appellate stage without it forming a pan of the order in original. However, the rules and procedures regarding reverse charge mechanism are unambiguously laid down and in the era of self assessment procedure, it is for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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