TMI Blog2018 (11) TMI 1829X X X X Extracts X X X X X X X X Extracts X X X X ..... ssarily a consideration for the service provided which is taxable under the Act. In this regard, it is observed by the committee that the provisions regarding value of supply under CGST / HGST Act, 2017, as contained in section 15 of the said Acts, are patently different from the provisions of Section 67 of the erstwhile Finance Act, 1994 that were applicable for determination of value of supply of services in the pre-GST regime. Thus, the clause (a) of sub section (2) of section 15 specifically provides that the value of supply shall include any taxes, duties, cesses, fees and charges levied under any law for the time being in force. So, the facts of the case are patently distinguishable. It is further submitted in the application that the applicant is only acting as a pure agent in respect of these charges, as envisaged under Rule 33 of the Central Goods Service Tax Rules, 2017. It is also submitted in the application that the concept of pure agent was also provided under Rule 5 (2) of the erstwhile Service Tax (Determination of Value) Rules, 2006. It was for this reason that vide Circular No. 334/1/2010-TRU, dated 26.02.2010, it was clarified that development charges, to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ana Development and Regulation of Urban Areas Act, 1975 (for short 'HDRUA Act' ). 4. The clause (g) of section 2 of the HDRUA Act defines external development works as under: (g) external development works shall include any or all infrastructure development works like water supply, sewerage, drains, provisions of treatment and disposal of sewage, sullage and storm water, roads, electrical works, solid waste management and disposal, slaughter houses, colleges, hospitals, stadium/sports complex, fire stations, grid sub-stations etc. and/or any other work which the Director may specify to be executed in the periphery of or outside colony/area for the benefit of the colony/area. The clause (hha) of section 2 of the HDRUA Act defines infrastructure development charges as under: (hha) infrastructure development charges include the cost of development of major infrastructure projects The clause (jj) of section 2 of the HDRUA Act defines major infrastructure projects as under: (jj) major infrastructure projects include national/state highways, transport, Major water supply scheme and power facilities etc. 5. The Applicant vide his applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 8.2 The Applicant has further referred to sub-section 15(1) of the HGST/CGST Act, 2017 which provides that the value of a taxable supply of services shall be the transaction value, i.e. the price actually paid or payable for the said supply of services, where the supplier and recipient are unrelated and the price is the sole consideration for the supply. The Applicant has argued that inherent in Section 15(1) is the presence of contractual understanding of parties, which determines the price payable by the recipient to the supplier for the supply. It is the price paid or payable by the recipient to the supplier for the supply, which constitutes value of a taxable supply being the transaction value. The Applicant has submitted that to similar effect was the concept of consideration under the erstwhile Section 67 of the erstwhile Finance Act, 1994, which provided for valuation of taxable services for purposes of Service Tax law. Interpreting the same, Hon'ble Supreme Courtin Commissioner v. Bhayana Builders Private Limited, 2018 (10) GSTL 118 (SC) = 2018 (2) TMI 1325 - SUPREME COURT held that it is not any amount charged which can become the basis of value on which se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the area in the periphery of the colony and not inside it (which pertains to internal development charges). The IDC charges, as defined under the HDRUA Act, are also paid for major infrastructural work in the state as such. These charges are levied and collected under the HDRUA Act. As the developer is the licensee for development of colonies, the said amounts are collected from buyers through the developer-licensee. The role of a developer is similar to that of a pure agent, as envisaged under Rule 33 of the Central Goods Service Tax Rules, 2017. The concept of pure agent was also provided under Rule 5 (2) of the erstwhile Service Tax (Determination of Value) Rules, 2006. It was for this reason that vide Circular No. 334/1/2010-TRU, dated 26.02.2010, it was clarified that development charges, to the extent they are paid to State Government or local bodies, would be excluded from the taxable value levy for Service Tax purposes. 9. After careful consideration of the submissions put forward by the applicant, the observations of the authority are as under:- 9.1 The advance ruling sought by the Applicant is regarding determination of value of supply of services. The provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y/service tax, as applicable. 9.3 It is further submitted in the application that the applicant is only acting as a pure agent in respect of these charges, as envisaged under Rule 33 of the Central Goods Service Tax Rules, 2017. It is also submitted in the application that the concept of pure agent was also provided under Rule 5 (2) of the erstwhile Service Tax (Determination of Value) Rules, 2006. It was for this reason that vide Circular No. 334/1/2010-TRU, dated 26.02.2010, it was clarified that development charges, to the extent they are paid to State Government or local bodies, would be excluded from the taxable value levy for Service Tax purposes. In this regard, authority has observed from the perusal of the cited circular that it nowhere states that the role of developer is of pure agent. The conditions of pure agent as contained in rule 33 are not satisfied in the circumstances mentioned by the applicant as the first condition requires that the pure agent should make payment to the third party on authorisation of recipient of service is not met. 10. In view of the foregoing, we rule as under: RULING The amount of statutory charges i.e. External Developme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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