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TMI Blog2018 (9) TMI 1644X X X X Extracts X X X X X X X X Extracts X X X X ..... the MPGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or MP GST Act would be mentioned as being under the GST Act. 3. BRIEF FACTS OF THE CASE: 3.1 M/s. Jabalpur Entertainment Complexes Private Limited, Jabalpur [hereinafter referred to as the Applicant] is engaged in operation of a mall and multiplex. The applicant is having a single GST registration with GSTIN 23AABCJ64951IZA. The Applicant is having following four operations in the company: i. Multiplex (Cinemas) - Operating a 3 Movie screens multiplex and Snack Bar under Movie Magic banner; ii. Mall - Applicant owns and operates the South Avenue Mall and has given space to several brands under rent/revenue sharing basis. The Applicant is also charging Common Area Maintenance charges from tenants; iii. Food Court - Operates a food court in the Mall, which is an air-conditioned area with self-serve (dine-in) and take away arrangements; iv. SAM Retail - Operates a franchise apparel retail store within the Mall. 3.2 The Applicant is charging GST on outward supply of Goods & Services as under: i. Sale of Movie tickets - @28% (on tickets exceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned above. Therefore the Applicant is charging GST @5% on supply of food, drinks and & snacks from Food Court and Snack bar of Multiplex. ii. As per Section 16(1) of the CGST Act, "Every registered person, shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in Section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course of furtherance of business and the said amount shall be credited to the electronic credit ledger of such person". The inward supply of services of distributor share, Project Rental, Advertising, Security Agency and Housekeeping are used in the course of furtherance of his business hence full credit of the same is available. iii. As per Section 17(5) of CGST Act, Input Tax Credit shall not be available in respect of following, namely: "(c) Works Contract Services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service; (d) Goods or services or both received by a taxable person for construction of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Movie Distributor Revenue Share Bill, Projector Rental Bill, Advertisement Bill, Security Agency Bill and Housekeeping Bill can be claimed in full? It has been opined that in view of the facts and circumstances about the output services being provided by the Applicant through their four Divisions, Viz. Multiplex Division, Renting Division, Maintenance Division and Food Court, it appears that ITC on aforementioned Input Services would be admissible to the Applicant because the said input supply of services appear attributable towards their outward supply of services for furtherance of their business as provided under section 16 of the CGST Act 2017. However, in case of exempted supply of services, full ITC may not be available to the Applicant and in such a case the Applicant needs to reverse the ITC availed on exempted supply of services in terms of Section 17(1) of the Act ibid. 5.3 Whether ITC of GST paid on goods purchased for the purpose of maintenance such as vitrified tiles, Marble, Granite, ACP Sheets, Steel Plates, TMT Tor, Bricks, Cement, paints, chemicals, sanitary items etc. Can be claimed in full? The Jurisdictional CGST Commissionerate has opined that the Applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant is not availing such ITC for providing output works contract service, therefore it appears that the applicant is not entitled to avail ITC and any ITC so availed needs to be reversed by the Applicant. 6 RECORD OF PERSONAL HEARING: Shri Shree Nikhilesh Mlshra, DGM and Shree Vishal Shreevastav, Tax Consultant, appeared on behalf of the applicant and reiterated the submissions already made in the application. Subsequent to PH, the Applicant also submitted additional write-up on 09.07.2018 giving further details in furtherance of their extant application. The same are briefed as under: A. Process description of Restaurant services: The Applicant submitted that they mainly selling popcorn, cold drinks, sandwiches, tea & coffee etc. in the Snack Bar for which they have the facility of electric fryers, grillers, warmers, dispensing machine etc. These items are served in disposable plates/glasses etc. B. For movie show exhibition they have an agreement with V N Exhibitors who charge their revenue on revenue sharing of net ticket sales which start from 52.5% for the first week, and subsequently 45%, 37.5% and 30% for 2nd, 3rd and 4th week onwards respectively. C. As regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been taken. As we gather from the submissions of the Applicant, they are not providing any accommodation facility for lodging and boarding and they are also not availing ITC of tax paid on goods & services used/utilized for providing services from the said Snack Bar. Further, on a different point of argument, we would also like to consider whether the impugned service would fall under the category of Outdoor Catering. The term 'Outdoor Catering' was defined under Section 65(76)(a) of the erstwhile Finance Act 1994 as "Outdoor caterer means a caterer engaged in providing service in connection with catering at place other than his own but including a place provided by way of tenancy or otherwise by the person receiving such service". On considering the common parlance meaning of 'Outdoor Catering' and its above definition for Service Tax, we come to the conclusion that the supply of food, soft drinks and snacks sold in the Food Court or Snack Bar of the Applicant cannot by any stretch of imagination, be treated as a part of outdoor catering. In view of the facts and circumstances, we are of the view that the services provided by the Applicant in Snack Bar would be cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely: (a)...................... (b)...................... (c)...................... (d) goods or services or both received by a taxable person for construction of an immovable property (other than plant and machinery) on his own account including when such goods or services or both are used in the course of furtherance of business. Explanation:- for the purpose of clause (c) and (d), the expression "construction" includes re-construction, renovation, addition or alteration or repairs to the extent of capitalization to the said immovable property. Thus we find that the materials in question are squarely covered by the clause (d) as detailed above since the same is being admittedly used for repair/renovation/maintenance etc. of the Mall building which is no doubt an immovable property. Explanation to the sub-section (5) has defined the term 'Construction' to encompass all the activities '.......to the extent of capitalization to the said immovable property.' Going by the said definition it has been argued that ITC of materials used for maintenance can be claimed in full if the cost of maintenance is not capitalized. We find that capitalization of expenditure d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h in concluding that ITC in respect of Works Contract Service utilised by the Applicant for repair/renovation/maintenance of Mall building shall not be available to them. 7.7 Having regard to the discussions & findings detailed in foregoing paras, we now give our ruling. RULING 8 The Advance Ruling on questions posed before the authority are answered as under: 8.1 In respect of Question 1, we hold that the items supplied in Snack Bar and Food Court shall be chargeable to GST in terms of Notification No.11/2017-Central Tax (Rate) as amended by Notification No.46/2017-Central Tax (Rate) and corresponding notification under MPGST ACT,2017 at prevailing rate of 5%(2.5% SGST and 2.5% CGST), subject to conditions laid down at Serial Number 7 of the parent Notification classifiable under SAC 9963; 8.2 In respect of Question No.2, it is held that the Applicant shall be entitled to ITC of tax paid on Movie Distributor Revenue Sharing Bill, Projector Rental Bill and Advertising Bill in full; further in respect of Security Agency Bill and Housekeeping Bill, the ITC shall be restricted to the apportioned part which is utilised in providing taxable output services. Any ITC attributable to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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