Home Case Index All Cases GST GST + AAR GST - 2018 (11) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (11) TMI 1829 - AAR - GSTValuation of supply of services - inclusion of amount of statutory charges i.e. External Development Charges and Infrastructural Development Charges, recovered by the Applicant from buyers and paid further to respective government authorities - HELD THAT:- The provisions for determination of value of supply under the CGST/HGST Act, 2017 are provided under section 15 of the said Acts. The clause (a) of sub-section (2) of section 15 of the said Acts provides that the value of supply shall include any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the SGST Act, the UTGST Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier. Hon'ble Supreme Court in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT] held that it is not any amount charged which can become the basis of value on which service tax becomes payable but the amount charged has to be necessarily a consideration for the service provided which is taxable under the Act. In this regard, it is observed by the committee that the provisions regarding value of supply under CGST / HGST Act, 2017, as contained in section 15 of the said Acts, are patently different from the provisions of Section 67 of the erstwhile Finance Act, 1994 that were applicable for determination of value of supply of services in the pre-GST regime. Thus, the clause (a) of sub section (2) of section 15 specifically provides that the value of supply shall include any taxes, duties, cesses, fees and charges levied under any law for the time being in force. So, the facts of the case are patently distinguishable. It is further submitted in the application that the applicant is only acting as a pure agent in respect of these charges, as envisaged under Rule 33 of the Central Goods & Service Tax Rules, 2017. It is also submitted in the application that the concept of pure agent was also provided under Rule 5 (2) of the erstwhile Service Tax (Determination of Value) Rules, 2006. It was for this reason that vide Circular No. 334/1/2010-TRU, dated 26.02.2010, it was clarified that development charges, to the extent they are paid to State Government or local bodies, would be excluded from the taxable value levy for Service Tax purposes. In this regard, authority has observed from the perusal of the cited circular that it nowhere states that the role of developer is of pure agent. The conditions of pure agent as contained in rule 33 are not satisfied in the circumstances mentioned by the applicant as the first condition requires that the pure agent should make payment to the third party on authorisation of recipient of service is not met. The amount of statutory charges i.e. External Development Charges and Infrastructural Development Charges, recovered by the Applicant from buyers and paid further to respective government authorities will form part of value of taxable supplies being made by the Applicant.
|