TMI Blog2021 (7) TMI 591X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case, the Entry, is clear and hence it is only a question of interpreting the same. The intention of the Circular appears clear, that is, to grant exemption in regard to the receipts from services that answer to the description set out therein. The description of the services is also clear, that is, services to the members of an unincorporated body or non-profit by way of reimbursement of charges or share of contribution upto an amount of ₹ 7,500/- in the sourcing of goods or services from a third person for the common use of its members. No ambiguity presents itself on a plain reading of the Entry and the intention is clear, so as to remove from the purview of taxation contribution upto an amount of ₹ 7,500/-. In the case of Dilip Kumar, the Supreme Court reiterates the settled proposition that an Exemption Notification must be interpreted strictly. The plain words employed in Entry 77 being, upto an amount of ₹ 7,500/- can thus only be interpreted to state that any contribution in excess of the same would be liable to tax - the term upto hardly needs to be defined and connotes an upper limit. It is interchangeable with the term till a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the extent to which it is relevant, is extracted below: Exemption from CGST on specified intra-State services. In exercise of the powers conferred by sub-section (1) of Section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts the intra-State supply of services of description as specified in column (3) of the Table below from so much of the central tax leviable thereon under sub-section (1) of section 9 of the said Act, as is in excess of the said tax calculated at the rate as specified in the corresponding Entry in column (4) of the said Table, unless specified otherwise, subject to the relevant conditions as specified in the corresponding Entry in column (5) of the said Table namely, (1) (2) (3) (4) (5) Sl.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of services Rate (per cent.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to this issue. The AAR, by impugned order dated 21.06.2019, held adverse to it stating that the grant of exemption was conditional upon the contribution being an amount of ₹ 7,500/- or less. If the contribution exceeded the sum of ₹ 7,500/-, then the very entitlement of that RWA to exemption would stand defeated and the entirety of the amount collected would have to be brought to tax. 7. The relevant portion of the ruling of the AAR is as follows: RULING If a service by the applicant, a registered housing society/resident welfare association to its members by way of reimbursement of charges or share of contribution for sourcing of goods or services from a third person for the common use of its members, is such that it is above 7500 rupees per month effective from 25.01.2018 (5000 rupees before), it is not eligible S No 77 (c) of Notification No. 12/2017-C.T. (Rate) dated 28.06.2017 as amended for CGST and of SI No 77 (c) of Notification No.11(2)/CTR/532(d-15)/2017 vide G.O. (Ms) No. 73 dated 29.06.2017 as amended for SGST. CGST and SGST at appropriate rates are to be paid by the members on the full amount of reimbursement of charges or share of contri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Bye law, Rule, Regulation, Notification, custom or usage, excluding Circulars. Thus the withdrawal of a statutory exemption by way of a Circular is contrary to the provisions of the Constitution. 11. Based on the aforesaid clarification initially issued by the Department, the petitioner RWAs have been collecting tax only on that component of the contribution that exceeds ₹ 7,500/-. They urge that if a contrary view were to be taken at this juncture, it would be impossible for the Associations to collect the shortfall as there would have been several changes in ownership of the property, in the interim. 12. Learned Senior Standing Counsel appearing for the revenue would stress on the provisions of Section 15 of the GST Act, as per which, it is the transaction value that is liable to GST. The transaction value in this case is represented by the contribution made and it should, in entirety, be taken into account for the purpose of levying tax. She points out that the exemption is intended for the middle class and not for luxury apartments/their owners. 13. She compares the provisions of the Tamil Nadu Additional Sales Tax Act, 1970 (TNAST), particularly the charging s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce it is only a question of interpreting the same. 17. The intention of the Circular appears clear, that is, to grant exemption in regard to the receipts from services that answer to the description set out therein. The description of the services is also clear, that is, services to the members of an unincorporated body or non-profit by way of reimbursement of charges or share of contribution upto an amount of ₹ 7,500/- in the sourcing of goods or services from a third person for the common use of its members. No ambiguity presents itself on a plain reading of the Entry and the intention is clear, so as to remove from the purview of taxation contribution upto an amount of ₹ 7,500/-. 18. Let me compare the Entry in question with other entries granting exemptions. The difference in language is emphasized in bold. (i) SSI Exemption Notification No. 8/2003 C.E. dt. 01.03.2003. In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) (herein after referred to as the Central Excise Act) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) up to an amount of five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex; (iii) S.No.30 of Notification 25/2012 ST Dt.20.06.2012. Notification No. 25/2012-Service Tax dated- 20th June, 2012, as amended. Incorporating changes made till issuance of notification no 10/2017-Service Tax dated 8-3-2017 G.S.R. 467(E).- In exercise of the powers conferred by subsection (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Act) and in supersession of notification number 12/2012- Service Tax, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 210 (E), dated the 17th March, 2012, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the following taxable services from the whole of the service tax leviable thereon under section 66B of the said Act, namely:- 30. Services by way of carrying out,- (i) any process amounting to manufacture or production of goods exclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government or a local authority, the exemption shall apply only where the gross amount charged for such service does not exceed ₹ 5000/- in a financial year; 19. A reading of the above extracts would indicate the difference in language adopted by the revenue in the matter of grant of exemptions. In a case where legislature intended that the exemption shall apply only to cases where the amount charged does not exceed a specified pecuniary limit, it states as much, as can be seen from the language deployed in the proviso to Clause 56 in Notification 25 of 2012 where it is stated the exemption shall apply only where the gross amount charged for such service does not exceed ₹ 5,000/- in a financial year . 20. Then again in Notification No.12/2017 dated 28.06.2017, Entry 78, dealing with services rendered by an artist reads thus: (1) (2) (3) (4) (5) Sl.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of services Rate (per cent.) Condition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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