The West Bengal Authority of Advance Ruling (AAR) ordered that GST is liable to apply on complete billing amount which consists of the employer part of Employees’ Provident Fund (EPF) and Employees’ State Insurance (ESI) amount.
The applicant, Ex-servicemen Resettlement Society comes under the enrolled society which provides the services and scavenging services (Karma Bandhus) to various Medical Colleges & Hospitals, District Hospitals, and other hospitals of the West Bengal Government.
Under the labor laws of the government of West Bengal, the petitioner avails the minimum Wage + Employer Portion of 13% EPF plus 3.25% ESI and charges tax at the 18% GST rate under act upon the total amount of bill in every month to furnish the security and Karma Bandhus (Scavenging) services to the Government Hospitals.
But “the audit Authority (Indian Audit and Accounts Department, West Bengal)” towards the audit of Bankura Sammilani Medical College and Hospital has asked against the excess GST payment on the note that GST is liable to pay on the Management Fees/Services Charges.
Petitioner seeks for the advance ruling upon the grounds of whether GST is liable to pay upon the Management Fee/Administrative charges or on the entire “billing amount and whether employer portion of EPF and ESI amount of the bill” is excused to pay the GST.
Two judges Brajesh Kumar Singh and Joyjit Banik held that there is no doubt that the GST act shall not deduct any amount otherwise towards the management fee, employer portion of EPF, and ESI for the objective of measurement of the value of supply beneath section 15 of the GST Act which means that the tax is applicable beneath section 9 of the Act on the complete billing amount.
