TMI Blog2019 (11) TMI 1451X X X X Extracts X X X X X X X X Extracts X X X X ..... t may adequately be inferred that the said entry does not talk about the fun or recreation in the nature of the arcade games as is in the present case of the Appellant. Hence, it can decisively be concluded that the aforesaid entry (iii) does not cover the activities of the Appellant. On the other side, the entry (iiia) of the amended Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 squarely covers the Appellant s activities as the gaming zone operated by the Appellant in the mall s closed premises are nothing but the amusement facilities as per the definition of the amusement facility provided under section 65 (B)(9) of the erstwhile Finance Act, 1994. Thus, it is clearly revealed that the provision of the fun or recreation by the Appellant by means of amusement rides and gaming devices deployed in the covered area of the mall premises, which can reasonably be construed as amusement arcade as has been established above, is nothing but the amusement facility. It is perspicuous that the gaming zone operated by the Appellant in the mall would be covered by entry (iiia) of Sr. 34 of the Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 as amended by the Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lassified based on the nature of games involving physical as well as mental skills which are coin operated, and card operated such as: Kiddie rides (i.e. carousel) Arcade games (i.e. car drive game) Redemption games (i.e. ball drop game) Play area with entry and exit inside our premises 2.3. The list of services containing brief of the gaming activity was enclosed with the appeal memo. 2.4. We are registered under the provisions of Goods and Services Tax ( GST ) law in the state of Maharashtra vide GSTIN- 27AAGCB3353E1ZX. 2.5. Prior to the inception of GST in India, we were registered under the provisions of Service Tax Law vide Chapter V of the Finance Act 1994 and discharged Service Tax at 15%. A copy of our service tax registration certificate and copy of latest service tax return for the period April to June 2017 was enclosed with the appeal memo. 2.6. Further, we were also registered under the provisions of Bombay Entertainment Duty Act, 1923 (`Bombay Entertainment Act ) and paid applicable entertainment tax on the activities undertaking in the gaming zone. 2.7. With the inception of GST in India, both the erstwhile indirect taxes i.e. s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet, we sought Advance Ruling as to determine the applicable rate of GST on the services/ activities of the Company. 4. FACTS PLACED BEFORE ADVANCE RULING AUTHORITY 4.1. The Company had submitted that the services provided by them falls under the ambit of amusement park to qualify for the reduced GST rate of 18%. 4.2. The company has relied on definition of an amusement park as stated in the erstwhile Bombay Entertainment Act [Section 2(a-1)] which includes the games and rides or both as in the case of the Company. Quote amusement park means a place wherein various types of amusements including games or rides or both (but excluding exhibition by cinematograph and video exhibition) are provided fairly on permanent basis, on payment for admission. 4.3. The fact that entertainment tax was applicable to the Company prior to the inception of Goods and Services Tax, also reinforces and authenticates the fact that the services provided by the Company are covered within the purview of an amusement park . 4.4. The Company has also relied on the term game as defined in the Bomb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cils) so as to increase the tax burden on the amusement parks. This will ensure that the rate cut in GST is passed on to children. 5. It was also submitted that the such amusement activities such as theme park, water park, requires physical participation of the participant whereas in case of cinematic films, race clubs, sporting event etc., the individual pays the cost of entry and enjoys the event as a spectator. Basis this, the GST council has differentiated the applicable GST rates to such events. AUTHORITY CONTENTION: 5.1. The Authority of Advance Ruling ( AAR or the Authority ) has mentioned the Wikipedia definition of amusement park wherein they have tried to rely on few below mentioned analogies, phraseologies for analysing the difference between amusement park and amusement facility : i. An amusement park has multitude of attractions such as rides, games and other events whereas, an amusement facility offers singular attraction by way of gaming machines. ii Amusement park is spread over a large area of land whereas, an amusement facility is spread over limited area/ closed area. iii. Amusement park may contain other auxiliary facilities li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ews expressed in the press release dated 22 January 2018 pursuant to the 25th GST Council meeting based on the recommendation of which the Notification 1/ 2018 was issued to reduce GST rate to pass on the benefit of GST to children and promote social wellness and entertainment. 6.2. Neither does the GST law provide the definition of an amusement park nor clarification any is provided by the Government for interpretation of the above press release. 6.3. From pure reading of the press release, it is prudent that the Government had proposed this reduction in GST rate for promotion of beget fun, learning and social wellness which is the primary business activity of BNIPL 6.4. Further, the Authority have also not considered the following submission made by the company which highlight the purpose and social wellness and entertainment. a) List of activities of the Company i. Joy ride for children o This includes activities like merry go-round, cyclone motor, ice wheel which are small sized rides for children. ii. Children amusement game o Amusement games such as pac-man smash, PM air hockey, fun hoops, music fairy. These activities pertain to table, ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.3. Company contention Basis the Wikipedia definition of an amusement park referred by the AAR, we have highlighted the key highlights of the definition relevant to operations carried out by BNIPL: i. Various attractions, such as rides and games BNIPL is engaged in providing amusement activities and running a family entertainment center; The Company has various gaming equipment and machine such as Kiddie rides, arcade games, redemption games, play area; The Company has submitted a comprehensive list of its entertainment games and rides to the AAR ii. Attractions around a central theme BNIPL is established around a central theme of Pac-man and Ghostly Adventures ; The theme is based on an arcade game in which one tries to devour all the cookies on a stage while trying to avoid the chasing ghosts. iii. Has long lasting operations unlike temporary and mobile fun fair and carnivals BNIPL was established in India in June 2015; BNIPL is engaged in providing amusement services and running family entertainment center in Mumbai since October 2016 till date iv. Cater variety of age groups BNIPL provides a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of wildlife or natural habitats. Urban parks are green spaces set aside for recreation inside towns and cities. National parks and Country parks are green spaces used for recreation in the countryside. State parks and Provincial parks are administered by sub-national government states and agencies. Parks may consist of grassy areas, rocks, soil and trees, but may also contain buildings and other artifacts such as monuments, fountains or playground structures. Many parks have fields for playing sports such as soccer, baseball and football, and paved areas for games such as basketball. Many parks have trails for walking, biking and other activities. Some parks are built adjacent to bodies of water or watercourses and may comprise a beach or boat dock area. Urban parks often have benches for sitting and may contain picnic tables and barbecue grills The largest parks can be vast natural areas of hundreds of thousands square kilometers (or square miles), with abundant wildlife and natural features such as mountains and rivers. In many large parks, camping in tents is allowed with a permit. Many natural parks are protected by law, and users may have to follow restrictions (e.g. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the above allegation: i. The AAR in its order has mentioned that that an amusement park may contain auxiliary facilities. The use of the word may express the possibility of the presence of auxiliary facilities in an amusement park. ii. It does not mandate the requirement for auxiliary services for a business activity to qualify as an amusement park. iii. Also, on reading the Wikipedia definition of an amusement park referred by the AAR in its order, it is prudent to note that there is no discussion / indication/ mention/ of any auxiliary services. iv. The definition of amusement park provided by AAR is in contradiction to their allegation. v. It is relevant to note that this definition also does not mandate any necessity to provide auxiliary activities for an amusement park. vi. Further, we would again like to refer of the Bombay Entertainment Act [Section 2 (a-1)] Quote Amusement park means a place wherein various types of amusements including games or rides or both (but excluding exhibition by cinematograph and video exhibition) are provided fairly on permanent basis , on payment for admission. 8.5.4. Analysis: R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the burden to prove taxability lies on the Revenue ii. Also, as the definition of an amusement park is not mentioned in the GST law, the same should be referred from the subject matter reliable Bombay Entertainment Act. 8.7. No analytical supporting or basis provided for interpretation: The Company is aggrieved by the order passed by the AAR due to following reasons: i. AAR have not analyzed the nature of business by the Company. They have not referred to the submission made by the Company i.e. the list of nature of services provided and the Company brochure. ii. The order passed by AAR is based on non- analytical supporting where the phrases/ words, interpretations and definitions are on limited basis (i.e. relied on the dictionary meaning as per the Wikipedia site, etc.). Further, such interpretations do not form any analytical base but tweaked revenue favoring s. iii. The authority has provided no basis such as appropriate judicial precedents for similar activities/ clarification dismissing the case is provided. 9. The order passed is not in public interest and has not considered the intention of the Government expressed in the Council meetin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -carting, casinos, race-course, ballet, any sporting event such as Indian Premier League and the like are chargeable at the prescribed GST rate of28% (CGST 14% and SGST 14%) in term of S. NO. 34 (iii) of the Notification No. 11/2017 - Central Tax (Rate), New Delhi dated 28th June 2017. 13. However, the abovesaid entries of S. No. 34 (iii) of the Notification No. 11/2017 - Central Tax (Rate), New Delhi dated 28th June 2017, were bifurcated vide amendment Notification No 01/2018 - Central Tax (Rate), New Delhi dated 25th January, 2018, whereby services by way of admission to amusement parks including theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet at S. No. 34 (iii) of Original Notification No. 11/201 7 - Central Tax (Rate), New Delhi dated 28th June 2017, were made chargeable at GST rate of 18% (CGST 9% and SGST 9%). 14. However, the services of admission to amusement facility including the one provided by the Applicant in forms of offering gaming machine, were kept under a new S. No. namely 34(iiia) which still remained chargeable at the rate of 28% (CGST 14% and SGST 14%). 15. There is a fundamental difference between amusement facility at ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ictionary meaning of park includes, a large area of land that is used for a specific purpose . However, in case of the subject amusement facilities provided by the Appellant, there is no scope that their gaming facility can be construed as a park, inter-alia because, it is not spread over a large area of land. Therefore, the amusement facility of the Appellant by way of deploying gaming machines can neither be construed as a park nor as an amusement park, so that the benefit of lower rate of GST vide amended S. No. 34(iii) of Notification No. 11/2017 - Central Tax (Rate) may be available to them. 19. The Hon ble Supreme Court in a recent judgment in case of COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI V /s M/s. DILIP KUMAR AND COMPANY ORS., Civil Appeal No. 3327 of 2007 = 2018 (7) TMI 1826 - SUPREME COURT at para 52 held that; (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such amb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term amusement park has been defined under various dictionaries as given below: - As per dictionaryreference.com A large park equipped with such recreational devices as a merry-go-round, Ferris wheel, roller coaster, etc., and usually having booth for games and refreshments. As per section 2 (a-1) of the Bombay Entertainment Duty Act amusement park means a place wherein various types of amusements including games or rides or both [but excluding exhibition by cinematograph or video exhibition] are provided fairly on permanent basis, on payment for admission. As per Webster Dictionary a commercially operated park having various devices for entertainment (as a merry-go-round and roller coaster) and usually booths for the sale of food and drink. As per Wikipedia: An amusement park is a park that features various attractions, such as rides and games, as well as other events for entertainment purposes. A theme park is a type of amusement park that bases its structures and attractions around a central theme, often featuring multiple areas with different themes. Unlike temporary and mobile funfairs and carnivals, amusement parks are station ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be set up in the closed premises such as the one where the Appellant has set up its gaming zone. These can be set up only in the large open space. Thus, this fact, further, substantiates that one of the essential characteristics of the amusement parks is its large open space. 26. Thus, it has been established beyond doubt that the gaming zone operated by the Appellant in the closed premises of mall is not the amusement park but the same can more reasonably be envisaged as amusement arcade. 27. Now, for the purpose of examining the entries, we would like to refer to the Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 as amended by the Notification No. 1/2018-C.T. (Rate) dated 25.01.2018, which is being reproduced herein under: Description of Services CGST Rate Condition (iii) Services by way of admission to amusement parks including theme parks, water parks, joy rides, merry-go rounds, go-carting and ballet. 9% - (ilia) Services by way of admission to entertainment events or access to amusement facilities including exhib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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