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2023 (7) TMI 570 - AAR - GSTScope of Advance Ruling application - Running and operation of the educational institution by way of joint venture - Recipient of service in the proposed joint venture - Levy of GST on amount which would be paid by the students to the educational institution proposed to be jointly operated by the applicant and Choice Estates and Constructions Pvt Ltd by way of the proposed joint venture - Levy of GST on applicant’s share in revenue from the educational institution - levy of GST on Choice Estates and Constructions Pvt Ltd.’s share in revenue from the educational institution - levy of GST on interest free refundable deposit proposed to be made by the applicant with Choice Estates and Constructions Private Ltd (CECPL). Who would be the recipient of service in the proposed joint venture? - Vis-a-viz Choice Estates and Constructions Private Limited, who would be the recipient of service in the proposed joint venture? - HELD THAT:- The question do not fall under the purview of any of the clauses of section 97 (2) of the CGST/KSGST Act, 2017. Moreover, in case of second question, the applicant is neither a supplied nor a recipient. Whether the amount which would be paid by the students to the educational institution proposed to be jointly operated by the applicant and Choice Estates and Constructions Pvt Ltd by way of the proposed joint venture would be liable to GST? - Whether Choice Estates and Constructions Pvt Ltd.’s share in revenue from the educational institution would be liable to GST? - HELD THAT:- These questions are not at all in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. Hence as per the definition of Advance Ruling, these questions are not ‘qualified’ to be included in the application for Advance Ruling. Whether the applicant’s share in revenue from the educational institution would be liable to GST? - HELD THAT:- The person supplying the goods or services or both is the supplier and supply is a broader term which inter alia includes the transaction by a constituent to the person termed by such constituents. And also, as per the explanation to the clause (aa) of Section 7 (1), such person and its constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another - The students enrolled in the educational institution pays fees as consideration to the educational institution for the educational services provided to them. As per the applicant, this revenue is shared between him and CECPL, who being the providers of input services to the educational institution which being a separate person as discussed supra. Hence that part of the total revenue received by the educational institution, which is paid to the applicant is the consideration received by the applicant for the service they provide to the educational institution. Hence this transaction is taking place from one such person to another and hence it constitutes a supply under the CGST/KSGST Act, 2017. This service falls under the Heading 9983 Other professional, technical and business service - of scheme of classification of services and is taxable @ 18% as per SI. No. 21 (ii) of the Notification No. 11/2017-Central Tax (Rate) dated 28 /06/ 2017 and S.R.O 370/2017 dated 30/06/2017 of Government of Kerala. Whether the interest free refundable deposit proposed to be made by the applicant with Choice Estates and Constructions Private Ltd (CECPL) would be liable to GST? - HELD THAT:- As per Rule 28 of the CGST/KSGST Rules, 2017, Value of supply of goods or services or both between distinct or related persons other than through an agent, be the open market value of such supply. In the open market, the consideration for services of extending deposits is normally Interest’. Hence the exemption under the above entry in SI.No. 27 is pertinent to the supply made by the applicant also - Thus, it constitutes a supply under the CGST/KSGST Act, 2017 but exempted from GST as per Notification No. 12/2017 - Central Tax (Rate) dated 28/06/2017 and S. R. O. No. 371/2017 dated 30/06/2017.
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