Home Case Index All Cases GST GST + AAR GST - 2023 (12) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (12) TMI 230 - AAR - GSTBenefit of exemption - Supply of Services by RWA - Contribution charged to a member exceeds INR 7500 per month - Benefit of Notification No. 12/2017 dated 28-6-2017 (Sl. No. 77) read with Notification No. 2/2018 dated 25-1-2018 - tax on amount charged over and above Rs. 7,500/- or the entire amount collected from members is exigible to tax? - Liability of GST on the amounts collected for corpus fund from members - CGST/ SGST on collection of common area electricity charges from the members when the same is recovered on actual basis. Whether tax would be charged over and above Rs. 7,500/- or the entire amount collected from members is exigible to tax? - HELD THAT:- The Government intends to provide the exemption only in cases where contribution received from a member per month is below the specified limit of Rs. 7500/-. In other words, where the contribution exceeds the limit, taxability of such services by RWA shall not get covered by entry number 77 of the aforesaid notification. We are, therefore, unable to accept the contention of the applicant that in the event of the monthly contribution charged to a member exceeding Rs. 7,500/- per month, tax is payable only on the differential amount. Liability of GST on the amounts collected for corpus fund from members - HELD THAT:- A sinking fund is created in order to meet future contingencies e.g., to meet the expenses for structural repairing, reconstruction work etc. RWA creates a sinking fund which serves as a backup fund for supply of specific services. A member contributes to the sinking fund with an agreed condition that the RWA will provide some specific services in future, as and when required out of the said fund - the amount collected by the applicant from its members towards sinking fund is only meant for meeting expenses for future supply of services and therefore such contribution cannot qualify as a deposit - thus it is held that the amount collected by the applicant from its members for setting up a sinking fund is an advance payment towards future supply of services and such payment comes under the definition of ‘consideration’ under clause (31) of section 2 of the GST Act. The applicant is, therefore, liable to pay tax on such supply in terms of sub-section (2) of section 13 of the GST Act. It would be pertinent to mention here that we are not in agreement with the view expressed by the officer concerned from the revenue on this issue. Whether the applicant is liable to pay CGST/ SGST on collection of common area electricity charges from the members when the same is recovered on actual basis? - HELD THAT:- In the instant case, admittedly the applicant collects the electricity charges consumed for common area from its members on pro-rata basis. In course of hearing, the authorized representative of the applicant has furnished copy of one tax invoice in support of ‘Common Area Maintenance’ issued to a member - electricity is being supplied bundled with supply of goods and services sourcing from a third person for the common use of its members. Thus supply of electricity forms a part of composite supply where the principal supply is the supply of common area maintenance services. The applicant is therefore liable to pay tax on collection of common area electricity charges if the services for common area maintenance fails to qualify for exemption under serial number 77 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended and as discussed earlier.
|