Hyderabad: The Roads and Buildings department of Vikarabad district has approached the Telangana High Court to challenge the orders of the GST Commissionerate. The Commissionerate directed Axis Bank and SBI Bank to freeze bank accounts belonging to the District R&B department and enable the GST department to deduct Rs 78.12 lakh from these accounts.
The GST Commissionerate of Sanga Reddy division is claiming this amount from the government department for service tax owed for services rendered from August 2013 to June 2016. Notices were issued to the government department in 2018, demanding Rs 26,07,568 in service tax and an equal amount in penalties. The issue has been pending since then, and recently, the GST wing instructed the banks holding R&B department accounts to freeze them.
Challenging this action, the Executive Engineer of Vikarabad R&B wing approached the High Court, contesting the GST Commissionerate's directive and the imposition of service tax. The services in question include laying optic fiber lines, road cutting and excavation, and renting out immovable properties belonging to the Roads and Buildings department. The department informed the court that service tax is exempted for government bodies and local bodies under the Finance Act. They also referred to GST Notification 1/2018, which outlines exemptions for services procured and supplied by government and local authorities.
The Division Bench, led by Justice Sujoy Paul, will hear the petition on Thursday.
