The vehicle owners will soon have to pay a GST of 18 percent in order to get a pollution certificate for their vehicles. The announcement is made by the Authority for Advance Ruling (AAR). The Goa bench of the AAR passed the ruling on an application filed by Venkatesh Automobiles on whether the service provided for issuing ‘Pollution Under Control’ (PUC) certificate on behalf of the state government is exempted from the Goods and Services Tax (GST). Currently, every vehicle needs to have a PUC that states that the vehicle emits emissions within the specified limits. Any vehicle found to be without a PUC is eligible to attract a fine of Rs 1,000. The validity of a pollution certificate is six months and needs to be renewed after that.
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The AAR said that the activity of issuance of Pollution Under Control certificate for vehicles issued by the applicant is not covered under SAC (Services Accounting Code) 9991 and is covered under residual entry and hence, should be taxed at 18 percent GST. As already mentioned, every vehicle plying on roads need a PUC certificate, which indicates that the emissions are in alignment with pollution norms and are not harmful to the environment. The AAR said that the government has authorised the applicant to issue PUC certificate on payments.
The ruling said that the service is provided by the applicant to the customers on payment of service charges. Since the services of testing of pollution are provided on payment of service charge, GST is payable at the applicable rate. Having said that, you may soon have to pay 18 percent GST while procuring a pollution certificate for your vehicle. Stay tuned with us for more updates!
