EXAMPLE-85
The
Department of post office provides service of speed post, express parcel to AB
Ltd. The total consideration for this service is Rs. 1 lakh. Determine who is
liable to pay GST.
Answer
As
similar to Service Tax, under GST also service provided by govt. or local authority is
covered under
exemption list but the following 4 services are not under the exemption
list:-
(i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Government;
(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;
(iii) transport of goods or passengers; or
(i) any service, other than services covered under clauses (i) to (iii) above, provided to business entities.
In view of the above provision postal dept providing services relating to speed post, express post has to collect GST and pay to Government. GST would be paid according to reverse charge mechanism in respect of above said 4 services even though provided to business entity is not under reverse charge mechanism.