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GST applicability on collection by RWA for Pollution Board Penalty

12 August 2021

Pollution Board has sealed a mall for not following pollution control protocols. A penalty of approx. Rs.80 lacs is required to be paid to Pollution Board for desealing. The exact amount has to be collected from shop owners as a one time contribution. Is RWA required to collect GST also on this contribution or is this contribution exempt from GST? Kindly help resolve this query with reason/applicable provisions?

Thanks and regards,

Vivek Kr Goel

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3 Replies

CA. Heet Shah (Tax Consultant & Practitioner) (6178 Points)
Replied 12 August 2021

RWA would be required to collect GST along with penalty from the members

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CA. Heet Shah (Tax Consultant & Practitioner) (6178 Points)
Replied 12 August 2021

Refer to Sub-clause (aa) of Section 7(1) of the CGST Act proposed to be inserted:

(aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice versa, for cash, deferred payment or other valuable consideration.

Explanation.––For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another”