Home Case Index All Cases GST GST + AAR GST - 2023 (1) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (1) TMI 81 - AAR - GSTClassification of supply - distinct supply or composite supply - naturally bundled services or not - amounts charged by the applicant for right to use of car/two wheeler vehicle parking space along with the sale of under constructed apartments to its prospective buyers is to be treated as a composite supply of construction of residential apartment services - rate of tax applicable on such charges collected by the applicant from its prospective customers - amounts collected for right to use of car parking space will also be treated as a NON GST supply - taxability would change if such charges for right to use of car parking space is collected after the sale of the apartment has been done i.e. the customer had not opted for the car parking space at the time of purchase of the under constructed unit, but had sought for the same after the unit was handed over to the customer after receipt of the completion certificate. HELD THAT:- In the instant case, the applicant enters into agreement with prospective buyers for sale of residential apartment. Such agreement can be made prior to issuance of completion certificate or post-issuance of the same. In course of personal hearing, the authorised advocate of the applicant furnishes copies of some allotment letter and tax invoices issued by the applicant. Sample copies of invoices issued by the applicant for sale of apartment post receipt of completion certificate have also been furnished by the authorised advocate. Construction services under Heading 9954 specified at items (i), (ia), (ib), (ic) and (id) against serial number 3 of Notification 11/2017-Central Tax (Rate) dated 28.06.2017, as amended vide Notification No. 03/2019-Central Tax (Rate) dated 29.03.2019, attract tax @ 1.5% and @ 7.5%, as the case may be w.e.f. 01.04.2019. Further, construction services under Heading 9954 specified at items (ie) and (if) against the aforesaid serial number attract tax @ 12% and @ 18% respectively - In the instant case, the applicant enters into agreement with prospective buyers for sale of residential apartment. Such agreement can be made prior to issuance of completion certificate or post-issuance of the same. Admittedly, it is at the choice of the buyers whether they would avail the facility or not. Further, an owner of a flat may avail this facility even after the issuance of completion certificate of the project. Furthermore, if there remains any un-allotted car parking space after allocation among the intending buyers, it is offered to allottees desiring additional car parking space. The fact delineates that such supply is altogether a separate service and cannot be treated as naturally bundled with the construction services. The applicant draws attention to the press release of the 47th GST Council meeting wherein clarification has been brought for GST applicability on preferential location charges in case of lease of plot - It appears that the clarification has been given in respect of location charges or preferential location charges (PLC) collected in addition to the lease premium for long term lease of land. However, here the issue is related to construction of residential project and right to use of car parking space which is different from the subject matter, as clarified in the circular. Supply of services for right to use of car parking space is a separate supply and not to be construed as a composite supply of construction of residential apartment services - In the instant case, supply of services for right to use of car parking space would be taxable @ 18% - tax is payable on supply of services for right to use of car parking space.
|