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2022 (11) TMI 390 - AAAR - GSTEligibility of avail ITC - Works contract services - Supply or not - activities of the society for its members - requirement to obtain registration under the GST law - If the activities of the applicant are treated as “supply” under the CGST Act, 2017 then whether the applicant is eligible to claim the ITC on input and inputs services for repairs, renovations & rehabilitation works carried out by the Applicant? Whether the Appellant can be construed as providing works contract services to its members while undertaking the activities relating to major repairs, renovations and rehabilitation works for the society by entering into an agreement with a contractor, namely, M/s. Unique Rehab Pvt. Ltd., which carry out the said repair, renovation, and rehabilitation work of the society? HELD THAT:- The Appellant society has been formed with an objective to facilitate or benefit their members by way of undertaking the aforesaid activities, thereby, providing services to their members against certain considerations called charges in terms of their Bye-laws. Accordingly, they have been levying 18% GST on the taxable components of the charges collected by them from their members. The same is evident from the invoices submitted by them along with the subject appeal memorandum. Here, although the Appellant have not mentioned, on their invoices, the SAC (Service Accounting Code) of the services being provided by them to their members, it is worthwhile to mention that all the said underlying services provided by the Appellant-society will be covered under the heading 9995 enumerated at SI. No. 33 of the Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 having the description “services of membership organization”, as all the underlying services including the services related to building repair and renovation for which the Appellant society is charging, from their members, a contribution towards the building repair fund arc being supplied in the capacity of the cooperative society only, which is nothing but a membership organization. The Appellant's contention of providing the works contract services to their members is not acceptable on another ground that society provides many services, such as security services, cleaning services, repair and maintenance services, etc., for which they recover the cost from their members under the head “maintenance charges”, and the Appellant society are not claiming to be provider of the aforesaid services and charging for the said services under different heads - it is clearly evident that they are trying to take this stand of providing works contract services to their members solely to avail ITC of the tax paid to the contractor on the works contract services, which were otherwise not available to them under the restrictions imposed under section 17(5)(c) of the CGST Act, 2017. Section 17 says that ITC would be available on tax paid on works contract services when such services are the input services for further supply of works contract service. Appellant does not fulfill the conditions laid down above. It has to be understood that the exception carved out to provide ITC in the case of tax paid on works contract is for those who in turn provide works contract service. For e.g., when a principal gets a contract of work executed from a sub-contractor and provides the same to the employer. In such a case, the principal becomes eligible for ITC even though the contract results in immoveable property - The society itself is not works contract service provider, nor it is in the business of providing works contract services. The works contract services received by society, from appointed contractor, are for the common benefit of the members. Hence, the Society's contention that they are providing works contract services to their members, and hence, eligible for the ITC of the tax paid to their appointed contractor can't be agreed to. Accordingly, they are not eligible for the ITC of tax paid to their contractors in terms of the limitations provided under section 17(5)(c) of the CGST Act. 2017.
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