Interestingly, It has been held by The UP bench of the Appellate Authority of Advance Rulings (AAAR) that though the parking fee paid by employees to the employer at the workplace is subject to GST as it comes within the domain of ‘supply of service’.
However; subsequently, it put limitations to its statement. The reason being, as the amount collected by the employer, is further paid to the builder; consequently, such services rendered by the employer can be classified into ‘agency services’ and so considering the aforesaid fact/entire picture, the value of Goods and Services Tax (GST) for Parking fees shall be Nil.
The above-mentioned appellate order was given by the honourable court in the case of ‘Ion Trading company’ that is based in Noida. The company contended that this service is not in furtherance of the domain of business of company i.e. software development. So the parking charges are not subject to GST.
The Appellate authority said that “the amount collected from the employees as car parking charges is a ‘supply of service
Get to know GST provisions and rules on the free supply of goods. Also, we have included rules regarding ITC reversal on free supplies of goods and services’ which would make GST applicable. However, if the employer company is not utilizing the charges collected for its own benefit and the entire sum is passed on to the building authority, it qualifies as a ‘pure agent’, which would make the value of services provided nil”.
