Facts of the Case

The petitioner was awarded contracts by the Andhra Pradesh State Road Transport Corporation (APSRTC) for cleaning and maintaining toilets at various bus stations. The respondents demanded GST at the rate of 18%, comprising 9% CGST and 9% APGST, on the monthly licence fee payable by the petitioner.

The petitioner contended that the Government of India had already granted exemption from GST through Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 under Heading 9994 for services provided by way of public conveniences such as bathrooms, washrooms, lavatories, urinals and toilets. A similar exemption was also issued by the Government of Andhra Pradesh through G.O.Ms. No. 588 dated 12.12.2017.

Despite these notifications, the respondents continued to demand GST, compelling the petitioner to approach the High Court under Article 226 of the Constitution seeking quashing of the GST demand.

Issues Involved

  1. Whether GST is payable on the monthly licence fee collected from a contractor engaged in maintenance and cleaning of public toilets at APSRTC bus stations.
  2. Whether services relating to maintenance of public conveniences are covered under GST exemption provided in Notification No. 12/2017-Central Tax (Rate).
  3. Whether the respondents were justified in demanding CGST and APGST despite the exemption notifications remaining in force.

Petitioner's Arguments

The petitioner submitted that:

  • Services rendered by way of maintenance and operation of public toilets fall squarely within Heading 9994.
  • Notification No. 12/2017-Central Tax (Rate) specifically grants NIL GST on services relating to public conveniences including bathrooms, washrooms, lavatories, urinals and toilets.
  • Andhra Pradesh Government also issued G.O.Ms. No. 588 granting identical exemption.
  • Since both notifications continued to remain operative, the respondents had no authority to levy GST on the monthly licence fee.
  • The demand raised by the respondents was arbitrary, illegal and contrary to the statutory exemption notifications.

Respondents' Arguments

The Commercial Tax Department opposed the writ petition by contending that:

  • The exemption notifications relied upon by the petitioner were not applicable to the facts of the present case.
  • Therefore, GST was rightly demanded on the licence fee collected from the petitioner.

No counter affidavit was filed by the respondents to substantiate their stand despite sufficient opportunity.

Court Findings / Order

After examining the exemption notifications, the High Court observed that:

  • Heading 9994 under Notification No. 12/2017-Central Tax (Rate) specifically exempts services by way of public conveniences such as bathrooms, washrooms, lavatories, urinals and toilets.
  • The Andhra Pradesh Government had also issued an identical exemption through G.O.Ms. No. 588.
  • Both exemption notifications continued to remain in force.
  • No subsequent notification had been issued withdrawing, modifying or overriding the exemption.
  • Consequently, the respondents had no legal authority to levy GST on the monthly licence fee paid for maintenance of toilets.

Accordingly, the High Court allowed the writ petition and declared the demand of 9% CGST and 9% APGST on the monthly licence fee for maintenance of toilets at APSRTC bus stations as illegal and improper. No order was passed as to costs.

Important Clarification

This judgment reiterates that:

  • Services relating to public conveniences covered under Heading 9994 continue to enjoy GST exemption unless the exemption notification is withdrawn or amended.
  • Authorities cannot levy GST contrary to an existing exemption notification.
  • Where statutory notifications grant NIL GST, administrative demands inconsistent with such notifications are liable to be set aside.
  • The decision strengthens the principle that exemption notifications must be implemented as long as they remain legally effective.

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785569828_2542compressed.pdf  

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