PANAJI: Comptroller and Auditor General of India (CAG) in its report has stated that the Directorate of Fisheries had to forego levy of Goods and Service Tax (GST) of 26.80 lakh on renting of immovable property, due to delay in registration under GST.
“The Directorate of fisheries had to forego levy of GST of ` 26.80 lakh on renting of immovable property, due to delay in registration under GST,”said CAG
The report states that under Sub-section (1) of Section 9 of the Act Central/State Goods and Service Tax shall be levied on all intra-State supplies of goods or services or both at such rates as may be notified by the Government and shall be paid by the taxable person. Sub-section (1) and (2) of Section 50 of GST Act, 2017 stipulates that interest at the rate of 18 per cent shall be levied on delayed payment of tax.
“The Directorate of Fisheries (DoF) provides service of renting its immovable property to a private party81 on payment of monthly rental fees of ` 21.27 lakh. Prior82 to implementation of GST the DoF was registered under Central Service Tax and applicable Service tax was credited into Government account for supply of service of renting immovable property,” the CAG said
After implementation of GST w.e.f. 01/07/2017, the Directorate of Fisheries (DoF) was liable for registration under GST regime as provided under Sub-section (2) of Section 22 of the GST Act, 2017. However, the DoF failed to register in GST regime w.e.f. 01/07/2017 and consequently could not levy GST amounting to 26.80 lakh on supply of services of renting immovable property83 to the party during the period from June 2017 to January 2018. Besides interest to the tune of 13.67 lakh for delay in payment of tax under Section 50 of the GST Act was leviable as under.
The Director, DoF stated (October 2019) that GST for the period (July 2017 to January 2018) was not levied on the rent collected as the circular to register under GST was received only on 25/09/2018 and the Department got registered under GST on 17/10/2018.
The reply of the Director, DoF is not tenable as the said circular dated 25/09/2018 contains instructions regarding deduction of TDS by all DDOs/Heads of departments under section 51 of the GST Act. The Directorate of Fisheries was liable to obtain registration w.e.f. July 2017 under section 22 of GST Act, 2017 and collect applicable GST for supply of services of renting immovable property to the party since the Directorate was registered under Central Service Tax in pre-GST regime.