TMI Blog2021 (11) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... such matters - the question posed does not pertain to matter in respect of which an Advance Ruling can be sought under the GST Act. In view thereof, the first question is not maintainable. Whether the society can claim ITC on repairs both major as well as minor? - HELD THAT:- Input tax credit generally is not available for construction, reconstruction, renovation, addition, alteration or repair of an immovable property even when such goods or services or both are used in course or furtherance of business. However, the limitation in such a situation is to extent of capitalization. The activity of repair and maintenance which encompasses supply of goods for a construction activity is of immovable nature. The provisions of ITC for the said supply of goods is covered under Section 17(5)(d) read with explanation mentioned therein. Therefore, ITC on GST paid on such goods as mentioned above will not be available to the extent of capitalisation on account of construction service in respect of the concerned immovable property as mentioned in Explanation of Section 17(5) of the CGST Act, 2017. The supply of goods and services supplied for construction work of an immovable nature can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 22Thi July 2019 RWAs are entitled to take ITC on GST paid by them on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary and hardware fittings etc.) and input services such as repair and maintenance services. But as per section 17 (5)(c), ITC shall not be available, when works contract services supplied for construction of immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service. Collective reading of not cation and section 17(5)c), gives contradiction picture to the extent of major repair work carried out with respect to immovable property. Hence, the society wants to understand if the registration is to be continued then whether the society can claim ITC on repairs both major as well as minor. 3. According to circular number 109/28/2019. GST dated 22 July 2019 RWAs are entitled to take ITC on GST paid by them on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary and hardware fittings etc.) and input services such as repair and maintenance services. The society claims exemption of INR 7,500 available to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the contractor. B. Statement containing the Applicant's interpretation of law and /or facts I. As per Circular number 109/28/2019 GST dtd 22.07.2019, Resident Welfare Associations (RWA) shall be required to pay GST on monthly subscription contribution charged from its members, only if such subscription is more than INR 7,500 per month per member and aggregate annual turnover of RWA by way of supplying services and goods is also INR 20 Lakhs or more. In case of the society, though annual turnover is more than INR 20 Lakhs, monthly maintenance per month per member is less than INR 7,500. In applicant's view GST should he charged only on Commercial Premises and Residential premises should be able to claim Exemption. 2.2 According to circular number 109/28/2019 GST dt 22.07.2019 RWAs are entitled to take ITC on GST paid by them on capital goods [generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary and hardware fittings etc.) and input services such as repair and maintenance services. But as per section 17 (5)c), ITC shall not be available, when works contract services supplied for construction of immovable property (other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Particulars Amount (INR) Contribution towards Maintenance 23,76,345 Property tax 17,34,304 Interest on arrears 10,69,304 Parking charges 6,63,556 Central service charges 12,99,600 N A Tax 84,000 Non occupancy charges 44,846 Change of use of charges 1,18,127 Total 73,90,082 Our argument - Though total collection received by way of contribution from members is more than INR 20 Lakhs, contribution towards maintenance per member per month is less than INR 7,500. Hence, the society is not liable to register under GST law. Society should be allowed to surrender GST registration. Vishal CHS is 'housing society' under section 2 (16) of the Maharashtra Co-operative Society Act, 1960. This is irrespective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C for major repair work carried out for buildings as it is for the furtherance of business of the society. Though society claims benefit of exemption of INR 7,500 as explained above, the society should be allowed to claim input tax credit on regular repair and maintenance work and for procuring capital and other goods. Irrespective of nature of expenditure incurred whether capital or revenue, benefit of input tax credit should not be denied to the society. 2.6 Point number 3 - Claiming Input Tax Credit Relevant legal provisions - As per Circular number 109/28/2019 GST dt 22.07.2019 RWAs are entitled to take ITC on GST paid by them on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary and hardware fittings etc.) and input services such as repair and maintenance services. According to section 17(2) read with rule 42 and 43 of CGST Rules 2017, where goods or services are used partly for effecting taxable supplies and partly for exempt supplies then the amount of credit as attributable to exempt supplies should be reversed. Applying above provisions of law - In case of residential flat, applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 22 to and 24 of the GST Act. The proper officer can cancel the registration as per the application filed by the taxpayer, after due verification. Hence the subject application is not maintainable u/s 97 of CGST/MGST Act 2017, hence application may be rejected. 3.5 Question raised by taxpayer (1) - Surrendering of GST registration In view of applicant's submissions, it is to submit that, Total maintenance charges includes the receipt of Interest or arrears, parking charges and central service charges, non-occupancy charges and change of use of charges, the said charges are taxable under GST statute. It means the taxable receipt due to other receipts has exceeded the turnover limit INR 20 Lakhs and hence TPs Registration is not required to be cancelled under the GST. In view of the above fact, it is to submit that, other than maintenance receipt is taxable under the GST statute. And TP is required to pay taxes under GST statute. The intention of the 'housing society' is only for residential purpose, whenever it includes garages and commercial shops then it is beyond the ambit of the RWA, hence the exemption towards the commercial shops and ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case may be if required threshold is crossed in terms of turnover of supply. The housing society and its members are distinct entities or distinct persons under MGST / CGST Act as per provisions of GST Act. ITC is a concession always subject to condition negative list. (Refer Hon. Supreme Court decision in case of M/s TVS Motors Company Ltd v/s State of Tamil Nadu, dt. 12/10/2018 in CA 10560 -10564 of 2018) 04. HEARING 4.1 Preliminary hearing in the matter was held on 22.01.2020. Shri Ulhas Gumaste, CA and Shri. Uday Gumaste, CA appeared, and requested for admission of the application. Jurisdictional Officer Shri. K. R. Bodkhe, learned Deputy Commnr, E-701, Nodal-7 and Shri. Sachin L. Jadhav, learned STO, C-713, Nodal-7 also appeared. 4.2 The application was admitted and posted for final e-hearing on 24.08.2021. The Authorized representatives of the applicant, Shri. Ulhas Gumaste, CA was present. The Concerned officer Shri. Pradeep Sharma, STO, MUM-VAT-C-713, Nodal 7 was also present. The Authorized representatives made oral and written submissions in this matter. The Concerned officer wanted time to make written submission. It was directed that the applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermination of the liability to pay tax on any goods or services or both,. f. whether applicant is required to be registered; g. whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. 5.3.3 We observe in the instant case, the question which has been raised by the applicant is not pertaining to any of the matters mentioned in Section 97 (2) of the CGST Act. In other words, Section 97(2), which encompasses the questions, for the ruling by this Authority does not deal with the issue of whether a GST registration should be surrendered. Hence, it is held that this authority does not have jurisdiction to pass any ruling on such matters. 5.3.4 In view of the above discussion, we reiterate that, the question posed before us does not pertain to matter in respect of which an Advance Ruling can be sought under the GST Act. In view thereof, we find that the first question is not maintainable. 5.4.1 The second question asked by the applicant is whether the society can claim ITC on repairs both major as well as minor. 5.4.2 The applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or services or both are used in course or furtherance of business. However, the limitation in such a situation is to extent of capitalization. The activity of repair and maintenance which encompasses supply of goods for a construction activity is of immovable nature. The provisions of ITC for the said supply of goods is covered under Section 17(5)(d) read with explanation mentioned therein. Therefore, ITC on GST paid on such goods as mentioned above will not be available to the extent of capitalisation on account of construction service in respect of the concerned immovable property as mentioned in Explanation of Section 17(5) of the CGST Act, 2017. 5.4.6 The applicant is engaged in club or association supply of service as a business and the construction service is used for furtherance of the said business. Thus the supply rendered by the applicant is also covered under Section 17(5)(d) read with explanation mentioned therein. ITC on GST paid on such supply of service as mentioned above will not be available to the extent of capitalisation of the said service. 5.4.7 Thus, the aforementioned supply of goods and services supplied for construction work of an immovable nature c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) For reasons as discussed in the body of the order, the questions are answered thus - Question.1. According to circular number 109/28/2019 GST dated 22 nd July 2019, Resident Welfare Association (RWA) shall be required to pay GST on monthly subscription contribution charged from its members, only if such subscription is more than INR 7,500 per month per member and aggregate annual turnover of RWA by way of supplying services and goods is also INR 20 Lakhs or more. In case of the society, though annual turnover is more than INR 20 Lakhs, monthly maintenance per month per member is less than INR 7,500. But the society also has 68 commercial shops, 233 residential flats and 18 garages. Hence, the society does not contain only residential flats. In view of this please confirm whether the society can stop paying GST and surrender the registration. Answer: - Not answered in view of discussions made above. Question.2 . According to circular number 109/28/2019 GST dated 22nd July 2019 RWAs are entitled to take ITC on GST paid by them on capital goods (generators, water pumps, lawn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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