Agencies may have to pay GST on service charges collected on govt's behalf

This follows a ruling by AAR Telangana on the matter, which also ruled that neither services provided by agency to govt, nor services provided on govt's behalf to businesses are exempt

Agencies, whether public sector or private sector, may have to pay goods and services tax on the charges they collect on behalf of the government from clients.

The authority for advance rulings (AAR), Telangana, has ruled that e-procurement transaction fee collected by an agency on behalf of the government is chargeable to GST, said Rajat Mohan, senior partner at AMRG & Associates.

The AAR also ruled that neither services provided by the agency to the government, nor services provided on behalf of the government to the business entities are exempt from GST, he informed about the case.

The case relates