2024-VIL-26-AAAR
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SGST AAAR

GST – Chhattisgarh AAAR - Taxability of amount paid to Forest Department as Abhivahan Permission Shulk which is levied on extraction of coal from coal mine situated in forest area – Whether the Authority for Advance ruling erred in holding that the amount paid by appellant to the Forest department as “Abhivahan Shulk” for obtaining permission for transit of coal from the forest area, is liable to GST at the applicable rate and is not liable to NIL rate of tax – HELD - the Abhivahan Shulk as collected by the Forest Department from the appellant is in lieu of granting permission for movement of Forest produce viz. coal from the forest area of Chhattisgarh State. The permit charges collected by forest department is used by the forest officials keep a watch on the mining activity and also to assess the quantity and type of mineral being quarried to carry out survey and also keep constant watch on the movement of the produce, and is not related to “Urban forestry, protection of the environment and promotion of the ecological aspect” or “Social forestry or farm forestry” under Article 243W or under Article 243G of the Constitution of India - the contention of the appellant that the services of permitting transit through the forests of Chhattisgarh by the Forest Department comes under the ambit of functions covered under the Article 243G and 243W of the Constitution being functions entrusted to the Municipality and Panchayat, is misplaced and devoid of merit - the “Abhivahan permission shulk” paid by the appellant is not eligible for NIL rate of GST, as provided under Sl. No. 4 & 5 of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017 – the appeal is dismissed - Classification of Supply – HELD - the appellant is a power generating company. The main raw material for generation of power is coal. The coal mines are situated in a forest area, and the appellant is paying Transit Fees or Abhivahan Shulk throughout the year on recurring basis to the Forest Department for issuance of transit pass whenever the Coal is cleared from the forest area. This is not a single transaction rather it’s a supply of the entire coal regularly to their power plants from the said coal block located in the forest and for which permission is granted by the Forest department. It is just for administrative convenience that vehicle wise Abhivahan Permission Shulk or Transit Fee is being paid by the applicant to the Forest Department. Therefore, the said service squarely falls under the category of “supply of continuous service” as per Section 2(33) of CGST Act, 2017.
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