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TMI Blog2021 (10) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... Bengal Authority for Advance Ruling Regulations, 2018. 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression 'GST Act' would mean the CGST Act and the WBGST Act both. 1.2 The applicant is stated to be a service provider engaged in rendering maintenance services to the owner of the apartments of "Emami City", a residential cum commercial area, situated at Jessore Road, Kolkata -700028. The said project has been developed with a facility of supply of cooking gas through pipeline from gas banks installed at different places in the project premises. 1.3 The applicant has made this application under sub-section (1) of section 97 of the GST Act and the rules made there un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assified as services. 2.6 The applicant has been providing maintenance services to the apartment owners for the common parts and portions and raising invoices for maintenance services to the apartment owners. 2.7 The details of common parts and portions are mentioned in the Third Schedule in the Deed of Sub Lease which does not include supply of cooking gas. 2.8 Said project has been developed with a facility of supply of cooking gas through pipeline from gas bank installed at difference places in the project premises and the apartment owners are required to pay a one-time charge per flat. However, the apartment owners are at liberty either to get the supply of cooking gas through the applicant or they may procure on their own. 2.9 Further, for the purpose of supply of cooking gas, the applicant purchases GAS cylinders of 14.2 Kg each from The India Trading Gas Company (hereinafter as 'the vendor'), an authorised distributor of Indian Oil Corporation (Indane) / Hindusthan Petroleum Corporation Ltd (HP) and said GAS is refilled in the gas bank from where gas is supplied to the apartment owners. The applicant procures the gas on payment of GST @ 5% [CGST 2.5%+ SGST 2.5%] under HS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in conjunction with each other in the ordinary course of business, one of which is a principal supply'. 2.16 The analysis of the definition of "composite supply" shows that any supply consisting of two or more taxable supplies should be treated as composite supply, if the supplies are- * Naturally bundled * Supplied in conjunction with each other in the ordinary course of business and * One of which is a principal supply 2.17 The term 'naturally bundled' is not defined in the GST law. In order to determine whether the supply of cooking gas and supply of maintenance service to the apartment owners are naturally bundled or not, the question which is to be answered is whether supply of cooking gas is combined with an element or elements of provision of the main service of maintenance service. 2.18 Seventh Schedule of the Deed of Sub Lease precisely describes the scope of maintenance service and how the maintenance charges are to be utilized. Said schedule inter alia provides as follows- * Repairing, rebuilding, repainting, improving or other treating as necessary and keeping the property in goods; * Keeping the gardens and grounds of the property generally in a neat an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and clause (b) says that a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax. 2.24 To fall within the ambit of clause (a) the supply has to be a composite one. Composite supply has been defined under section 2(30) of the CGST Act to mean a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is the principal supply. As to what is a principal supply is defined in section 2(90) of the CGST Act to mean the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary. In other words "principal supply" is the supply which gives the bundle its essential character. 2.25 Reverting to the facts of the present case, the principal supply of maintena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant as maintenance service provider of the said residential -cum- commercial project. (related agreement not submitted for perusal) iii) Seventh schedule of the registered deed of Sub-Lease (supra) describes the scope of maintenance service and the relevant point is "Generally managing and administering the development and protecting the amenities in the building and for that purpose employing and contractor and enforcing or attempting to enforce the observance of the covenants on the part of any occupants of any of the apartment." (Deed of Registered Sub-Lease, Schedule VII, Point 16) 3.5 Though in the Registered Sub-Lease, piped gas bank connection is not mentioned directly, but it is implied that the said "residential -cum- commercial" project has a reticulated gas system and applicant is in charge of its general maintenance including such reticulated gas system. 3.6 Perused the agreement between M/s Colliers International (India) Property Services Pvt Ltd and the applicant (dated 30-01-2020). It transpires from such agreement that the applicant is in charge of the overall maintenance of the above-noted residential complex including maintenance of such reticulated gas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... monthly fixed maintenance charge for upkeep and maintenance of gas bank, gas pipelines (within the said residential complex) and related fittings & fixtures [which is included in a consolidated maintenance bill raised monthly by the applicant]. Variable component is the charge for consumption of cooking gas. Both are the part of the same consideration and are for the contract of general maintenance and upkeep. Though it appears that the applicant is receiving the reimbursement of cost of cooking gas consumed, but flat -owners are not paying for the consumed cooking gas, but for the services of reticulated gas system, which is an integral part of the supply of service related to general upkeep and maintenance as narrated above. 3.11 So, the undersigned is of the view, that the consideration charged for the supply of cooking gas is nothing but an additional consideration for the general upkeep & maintenance of above stated reticulated gas system and attracts CGST @ 9% and SGST @ 9%. 4. Observations & Findings of the Authority 4.1 We have gone through the records of the issue as well as submissions made by the authorised representatives of the applicant during the course of person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant is at liberty to select the facility management company at its choice, negotiate the charges and also to collect the Facility Charges and Common Area Maintenance Charges directly from the owners/occupants and/or Association of the owners of the said residential complex as per the terms and conditions as may be decided and agreed upon by the applicant and the Facility Service Company or Property Management Company or agency or partner, as the case may be. 4.6 The applicant submits that he has entered into a 'Property Management Services Agreement' with Cooliers International (India) Property Services Private Limited (referred to as, service provider) for the purpose of obtaining property management services from the said company for the residential complex known as 'Emami City'. Scope of services under entry serial number 2(l) of Annexure-I of the aforesaid agreement reads as follows: 'upkeep and maintenance of gas bank, temple, pond, water bodies, swimming pool, main gate, security access control and services and all miscellaneous common amenities as per specifications is the responsibility of the service provider'.(emphasis given) Further, in terms of entry serial numb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inders are connected to the Manifold system in series and the Vaporized LPG is directly drawn from the cylinders with Natural Vaporization Process. It is then passed through the properly designed Pressure Reducing Station. 4.11 We thus find that supply of gas through LPG Reticulated System, considering the nature of supply and properties of the goods involved, essentially requires following installation services: * installation of gas bank; * installation of pipeline; * installation of gas leak detector; * installation of gas meter; 4.12 It is a matter of fact that all the gas banks are installed at the common area of the project. Further, the 'Agreement to sub-Lease' clearly specifies that all central and appurtenant installations for service such as electricity, telephone, television, gas shall be included in common parts & portions of the project. It is also a matter of fact that the applicant has been entrusted by the developer for providing all sorts of facility and property management services in respect of the said residential complex and to provide such services, the applicant obtains services from two service providers namely (i) Cooliers International (India) Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic Utility Services, who is issuing invoices towards 'operation and maintenance charges' for LPG Reticulated System, the value of supply cannot be segregated so as to ascertain how many of the apartment owners are paying this charges against use of pipeline gas supply. 4.20 It is submitted by the applicant that the apartment owners are at liberty either to get the supply of cooking gas through the applicant or they may procure on their own. However, the applicant has not furnished any document in support of such submission. It is, therefore, not clear to us whether an apartment owner has to enter into a separate agreement/contract with the applicant for procuring pipeline gas supply. The applicant has not furnished any documents before us regarding terms and conditions towards supply of gas through pipeline and whether the applicant has to follow any guidelines issued by the appropriate authority for supply of gas through pipeline. 4.21 We therefore observe that in the instant case, the applicant is providing facility and property management services to each and every apartment owner of the project. This service includes maintenance and repair services related to supply of cookin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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