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2020 (4) TMI 234 - AAR - GSTLevy of GST - water charges collected from the customers for supply of water under Contract Il - HELD THAT:- The applicant is involved in two agreements where Contract-I is for maintenance services provided to the Resident Welfare Association (RWA) and Contract-II is for supply of water to the individual resident residing in the society (RWA) - GST on services provided by the Resident Welfare Association (RWA) to its resident members is @ 18% when each unit household in a society pays more than ₹ 7500/- per month for said services and the supplier of services (RWA in the present case) is registered by way of crossing over of threshold limit of ₹ 20 lakhs. The applicant is providing services to the society (RWA) in two parts viz. all services of maintenance (other than supply of water) and supply of water. Further, as a general practice across trade and market, the maintenance services is inclusive of supply of water and hence supply of water provided by the applicant through a separate agreement raises a suspicion in its activity. The reason behind the suspicion is that the water received by the society (RWA) is used for multiple purpose i.e. for gardens, washing cleaning, swimming pool and for the use in the apartments etc. and is stored in the common underground water tank which is maintained by the society (RWA) - it is observed that the applicant seems to have bi-furcated the services provided to society (RWA) in order to escape the condition of ₹ 7500 per month per member or it might be crossing the GST registration threshold limit of ₹ 20 lakh. The supply of water in Contract-Il and supply of maintenance services in Contract-I are to the same society (RWA) and relevant to each other, hence there appears no case of direct supply of water by the applicant to the individual residents of the society(RWA). Contract-I and Contract-II appears to be directly linked with each other as there is no case of direct supply of water by the applicant to the individual residents of the society therefore the applicant is required to pay GST as applicable on Contract-I.
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