User Charges Collected Beyond Statutory Fees Not Exempt: GST Telangana AAR

In re Commissioner ESD MeeSeva (GST AAR Telangana)

The Telangana Authority for Advance Ruling considered an application filed by the Commissioner, ESD MeeSeva, Telangana under Section 97 of the TGST Act, 2017 seeking clarification on the availability of GST exemptions under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 for services rendered to non-business entities, business entities, small business entities, and Government entities.

The applicant explained that MeeSeva is a Government initiative providing Government-to-Citizen (G2C), Government-to-Business (G2B), and Citizen-to-Government (C2G) services through an online platform. It renders around 650 services, including licensing, permits, registrations, certificates, and other public services. The applicant collects fixed user charges from citizens, business entities, and Government departments and has been charging GST at 18% under SAC 998599 as “Other support services n.e.c.”

The AAR examined the Telangana Information Technology (Electronic Service Delivery) Rules, 2011 governing MeeSeva and noted that authorised service providers are entities authorised by the Director of Electronic Service Delivery to provide notified public services electronically. Agreements are entered into between the applicant and Government departments or other entities for rendering services through MeeSeva centres. In several cases, user charges are collected from entities or directly from citizens over and above the statutory charges payable to the concerned Government departments. The Authority observed that authorised service providers cannot be equated with the State Government and that they collect amounts in addition to the statutory fees prescribed under the relevant enactments.

The Authority analysed Serial Nos. 6, 7 and 9 of Notification No. 12/2017-Central Tax (Rate), which grant exemption to specified services provided by the Central Government, State Government, Union Territory or local authority. It observed that the notification exempts only supplies made by the Government. Charges or consideration collected by the Government towards discharge of statutory obligations are not liable to GST to the extent of the statutory levy unless otherwise provided under the GST law. However, any collection over and above the statutorily prescribed fee does not fall within the scope of the exemption entries contained in the notification.

The Authority further noted that the user charges collected by MeeSeva are over and above the statutory amounts payable to the concerned departments and that the services rendered are not confined to Government departments, as services are also provided to entities such as TSSPDCL and others. Accordingly, the user charges collected from business entities, non-business entities, citizens and Government entities were held not to be covered by the exemption entries under Notification No. 12/2017-Central Tax (Rate) and were held liable to GST under the CGST/TGST Acts.

The Authority answered all four questions raised by the applicant in the negative and held that the applicant was not eligible to claim exemption under Serial No. 6(d), Serial No. 7, or Serial No. 9 of Notification No. 12/2017-Central Tax (Rate) in respect of the services covered by the application.

FULL TEXT OF THE ORDER OF APPELLATE AUTHORITY FOR ADVANCE RULING,TELANGANA

1. M/s. Commissioner ESD MeeSeva, Telangana, Banjara Hills, Hyderabad —500 034, Telangana (GSTIN 36AAGC0352A1ZA) has filed an application in FORM GST ARA-01 under Section 97(1) of TGST Act, 2017 read with Rule 104 of CGST / TGST Rules.

2. At the outset, it is made clear that the provisions of both the CGST Act and the TGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the TGST Act. Further, for the purposes of this Advance Ruling, the expression ‘GST Act’ would be a common reference to both CGST Act and TGST Act.

3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- under SGST and Rs.5,000/- under CGST towards the fee for Advance Ruling. The Applicant has declared that the questions raised in the application have neither been decided nor are pending before any authority under any provisions of the CGST/TGST Act’2017. The application is, therefore, admitted after examining it and the records called for and after hearing the applicant as per section 98(2) of TGST Act’2017.

4. BRIEF FACTS OF THE CASE:

4.1 COMMISSIONER ESD MEESEVA TELANGANA, MCH BUILDING, MEESEVA, ROAD NO-7, BANJARA HILLS, Hyderabad, Telangana, 500037 (hereinafter referred to as `Applicant’) is the head of department of ESD MeeSeva, a good governance initiative by the State Government of Telangana for providing Government-to-citizen (G2C), Government to Business (G2B) and citizen-to-Government (C2G) services. Electronic Services Delivery (ESD) MeeSeva functions under the administrative control of Information Technology and Communications (IT&C) Infrastructure Department, Government of Telangana.

4.2 The pilot project of ESD MeeSeva (previously known as TWINS), was inaugurated on 03.12.1999 to cater to the citizens of Ward No. 8 of MCH, by providing 18 services pertaining to six departments and agencies viz Metro Water Works, RTA, AP Transco, MCH, Registration and Stamps and MPHS. A copy of Government Order (G.0) No. 532 Finance & Planning (TEC) Dept. dt. 23.7.1998 is submitted. Gradually, the services were extended to whole of Telangana and as on today MeeSeva renders around 650 services to citizens, Government and Businesses. The name of the project has since been changed from “TWINS” to “e-seva” and further to “MeeSeva”.

4.3 MeeSeva in Telangana stands as a pioneering platform, seamlessly bridging the gap between government services and the citizens of the State. Catering to both business entities and individual citizens, the Applicant offers a comprehensive range of services aimed at simplifying bureaucratic processes and enhancing accessibility. It’s an online platform that provides various government services to citizens, enabling them to access a wide range of services in a convenient and transparent manner.

4.4 For business units, the Applicant serves as a one-stop destination for various administrative tasks, including licensing, permits, and registrations, facilitating smoother operations and compliance. Mean while, for ordinary citizens, MeeSeva provides essential services such as obtaining birth certificates, land records, income certificates, and more, all through a user-friendly online portal. A comprehensive list of services rendered by the Applicant to business units and to the normal citizens was submitted.

4.5 The Applicant collects fixed user charges from the citizens (i.e. Non-Business) and Businesses entities including Government departments for rendering the above services. The Applicant is registered under the GST Act vide registration no. 36AAAGC0352A1ZA and accordingly, levies GST on the said user charges at 18% under the taxable head “Other support services n.e.c.” classified under SAC 998599. A copy of the GST registration certificate (Form GST REG-06) was submitted.

5. QUESTIONS RAISED:

1. Whether the Applicant is eligible to claim the exemption on the services rendered to non-business entities in terms in S.No.6(d) of Notification No.12/2017- Central Tax (Rate) dated. 28-06-2017?

2. Whether the Applicant is eligible to claim the exemption on the services rendered to Business Entities where the consideration for services does not exceed Rs.5,000/- per transaction in terms in S.No.9 of Notification No.12/2017- Central Tax (Rate) dated. 28-06-2017?

3. Whether the Applicant is eligible to claim the exemption on the services rendered to business entities, having turnover less than Rs.20 Lakhs in the previous Financial Year and where the consideration for services does not exceed Rs. 5,000/- per transaction in terms in S.No.7 of Notification No.12/2017- Central Tax (Rate) dated. 28-06-2017?

4. Whether the Applicant is eligible to claim the exemption on the services rendered to Government Entities where the consideration for services does not exceed Rs. 5,000/- per transaction in terms in S.No.9 of Notification No.12/2017- Central Tax (Rate) dated. 28-06-2017?

6. PERSONAL HEARING:

1. The authorized representative Vignesh Srivatsava, CA appeared before the AARon 6.3.2026 and reiterated their averments in the application submitted.

7. DISCUSSION & FINDINGS:

7.1 The functions of the Electronic Service Delivery (hereinafter referred to as “MeeSeva”) centres are governed by the Telangana Information Technology (Electronic Service Delivery) Rules, 2011 (hereinafter referred to as ESD Rules). These Rules were notified by the Government in exercise of powers conferred u/s 90(1) of the Information Technology Act, 2000 (Act 21 of 2000).

7.2 The definitions in the ESD Rules relevant to the instant case are reproduced below:

b. “Authorized Agent” means an operator of an electronically enabled kiosk, who is permitted under these rules, either by the Government or by the Authorized Service Provider to deliver public services to the users with the help of a computer resource, following the procedures prescribed herein;

c. “Authorized Service Provider” means a body corporate authorized by the Director of Electronic Service Delivery , to establish and manage a system of delivering services electronically, in accordance with these Rules. The Authorized Service Provider can also be a Department or Agency of the Government ;

“Kiosk Operator” means the individual identified and retained by the Authorized Service Provider or the Government as Authorized Agent:.

7. Authorized Service Provides for electronic Service Delivery.

a. The Director of Electronic Service Delivery may authorize body corporate suitably qualified, equipped for the purpose and selected through the specified process to undertake activities required for delivery of public services electronically.

b. If shall be the responsibility of the Authorized Service Provider to provide the notified services electronically to the users in conformity with these rules, by establishing the required delivery infrastructure and a network of Authorized Agents.

c. The Authorized Service Providers shall be accountable for the efficiency. quality and accuracy of the services provided. The participating departments may, for this purpose, lay down norms on the efficiency, quality and accuracy in provision of their respective services in the form of service levels.

7.3 M/s. Commissioner ESD MeeSeva, Telangana, Banjara Hills, Hyderabad —500 034, Telangana is a registered entity with GSTIN 36AAGC0352A1ZA.

7.4 The following is observed from scrutiny of the material papers submitted by the applicant:

a. Agreements are entered between the applicant and Government Departments or other entities like TSSPDCL, TSNBCSF for providing services through MeeSeva centres.

b. In certain cases charges are collected from the other entity like HMWS&SB, TSNBCSF.

c. The MeeSeva Centre collects amounts in the form of user charges over and above the statutory charge leviable by the concerned Government department as per concerned law.

d. It is observed that M/s. HMWS&SB will pay ESD MeeSeva, Rs.35/- for every enrollment or integration of citizen for the Free Water Supply Scheme. Similarly, the TSNBCSF were billed user charges of Rs.35/- per transaction for certain Nayee Brahmins transactions.

e. MeeSeva also has a fee structure where the fee is collected from the user (citizen) directly like Rs.35/- per renewal of GHMC trade licence, etc.

The Authorized Services providers cannot be equated to the Stae Government.

The Authorized Services Providers is an entity opportunity by the Director ESD to execute certain services and entrusted with certain representatives

The Authorized Services Providers is collecting certain amount in addition to what is permitted statutory in the respective Acts of the participating department / entities.

7.5 The applicant requested to know their eligibility for exemption as per notification 12/2017 Central Tax (Rate) Dt. 28.6.2017. In order to avoid repetition, the entries quoted by the applicant are reproduced below:

Sl.No. 6 – Chapter 99 – Description of Services

Services by the Central Government, State Government, Union territory or local authority excluding the following services—

(a) 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 the Central Government, State Government, Union territory;

(b) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;

(c) transport of goods or passengers; or

(d) any service, other than services covered under entries (a) to (c) above, provided to business entities.

SI.No. 7 – Chapter 99

Services provided by the Central Government, State Government, Union territory or local authority to a business entity with an aggregate turnover of up to twenty lakh rupees (ten lakh rupees in case of a special category state) in the preceding financial year.

Explanation.- For the purposes of this entry, it is hereby clarified that the provisions of this entry shall not be applicable to-

(a) Services,- (i) by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than the Central Government, State Government, Union territory; (ii) in relation to on aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) of transport of goods or passengers; and

(b) Services by way of renting of immovable property.

Sl. No. 9 – Chapter 99

Services provided by Central Government, State Government, Union territory or a local authority where the consideration for such services does not exceed five thousand rupees:

Provided that nothing contained in this entry shall apply to-

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 the Central Government, State Government, Union territory;

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:

Provided further that in case where continuous supply of service, as defined in sub-section (33) of section 2 of the Central Goods and Services Tax Act, 2017, is provided by the Central Government, State Government, Union territory or a local authority, the exemption shall apply only where the consideration charged for such service does not exceed five thousand rupees in a financial year.

7.6 It is noticed that the user charges collected by MeeSeva are over and above the amounts statutorily payable to the concerned departments.

Further, the services rendered are also not entirely relating to Government departments. MeeSeva also renders services relating to entities like TSSPDCL etc.

7.7 From a reading of the relevant entries in the notification 12/2017 Central Tax (Rate) cited above, it is clear the only supplies made by the Government are exempt or nil rated. That leads to the conclusion that any charge / consideration made towards the service by the Government for discharge of a statutory obligation would not be exigible to GST to the extent of the statutory levy, unless otherwise prescribed in any other provision of the GST Act. Any collection of amounts over and above the statutorily prescribed charge / fee (or by whatever name it may be called by the concerned department) would not fall under the purview of the entries read above under notification 12/2017.

7.8 Therefore, it is concluded that the charges collected by MeeSeva from the business entities or the non-business entities (citizens etc) are not covered by the entries in notification no. 12/2017 Central Tax Rate dt. 28.6.2017 and are liable to tax under CGST / TGST Acts.

8. In view of the foregoing, we rule as follows:

In view of the above discussion, the questions raised by the applicant are clarified as below: