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TMI Blog2023 (5) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... nt being booked by them and accordingly the buyers who opt to avail the car parking facility are charged a certain sum towards the car parking space and the same forms part of the total consideration charged by the Appellant from the prospective buyer. It is to be mentioned that the project commenced prior to 01.04.2019 and the Appellant exercised option to remain in the old tax rate prior to 01.04.2019. 3. The Appellant sought an advance ruling under section 97 of the West Bengal Goods and Services Tax Act, 2017/ Central Goods and Services Tax Act, 2017 (hereinafter referred to as the "GST Act") before the WBAAR on the following questions: (a) Whether the amounts charged by the applicant for right to use of car/two wheeler vehicle parking space along with the sale of under constructed apartments to its prospective buyers is to be treated as a composite supply of construction of residential apartment services or the same is a distinct supply under section 7 of the CGST/WBGST Act, 2017. (b) If the same is not to be treated as a composite supply, then the rate of tax applicable on such charges collected by the applicant from its prospective customers. (c) If such apartments ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed fit and proper in the facts and circumstances of the case on the following grounds: a) The WBAAR erred in not considering the supply of car parking space by the Appellant to its prospective customers along with allotment of units in the project as a composite supply; b) The WBAAR failed to pass a speaking order and merely referred to the earlier order of the Appellate Authority without analyzing the facts of the instant case and ignored the submissions made by the Applicant. c) The WBAAR erred in interpreting the definition of composite supply. d) The WBAAR has failed to realize the aspect that the car parking space cannot be given to any person who does not possess/opt for a residential unit inside the project area and stamp duty is paid on the entire consideration charged by the Applicant towards the unit price of the apartment and car parking space at the time of conveyance of the said property. e) The WBAAR erred in stating that the Circular No. 177/09/2022-TRU dated 03.08.2022 was not applicable in the instant case as the said Circular dealt with leasing transactions while the instant case is a matter of construction services. 6. During the course of hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... becomes a non GST supply consequently the entire supply (apartment and right to use of open parking space) being a bundled supply is treated as non GST supply and hence no GST is charged on it. The Appellant's representative further stated that the appellant was registering the deed of conveyance of both sale of apartment and right to use of open parking space and payment of statutory stamp duty was being made on the entire consideration received from the bundled supply. Reference was drawn by the Appellant's representative to Circular No. 34/8/2018-GST dated 01.03.2018, where it was clarified that "the primary question that should be asked is what is the essential nature of the composite supply and which element of the supply imparts that essential nature of the composite supply". It was further clarified in case of re-treading tyres the essential supply was the service of re-treading and the supply of rubber in the process was an ancillary supply. In line with this argument the Appellant's authorized representative stressed on the point that the facility of right to use of open parking space is naturally bundled with the construction services for /sale of apartment. 8. The Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd covered. Though the Appellant's authorized representative submitted that in the current project of the Appellant there are both covered and open parking spaces, during the course of hearing he argued on the supply of services of right to use of open parking spaces only. 13. Now let us look at the provisions of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as the RERA). For the sake of clarity certain definitions from the said Act are reproduced below: "allottee" [sub-section (d) of section 2] in relation to a Real Estate Project means the person to whom a plot, apartment or building, as the case may be, has been allotted, sold (whether as freehold or leasehold) or otherwise transferred by the promoter, and includes the person who subsequently acquires the said allotment through sale, transfer or otherwise but does not include a person to whom such plot, apartment or building, as the case may be, is given on rent "common area" [sub-section (n) of section 2] means (i) the entire land for the real estate project or where the project is developed in phases and registration under this Act is sought for a phase, the entire land for that phase; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the consideration collected from allottees for right to use of open parking spaces will not form a part of value of composite supply as prayed for by the Appellant. The amount charged by the appellant for right to use of car/two wheeler vehicle parking space, though not permissible as per RERA, constitutes a separate supply under the GST Act and the appellant is therefore liable to pay tax @ 18% on such supply. Further, the question of one-third abatement of valuation of land for open parking space is not maintainable as the "common area" which includes such open parking space is considered in the valuation of apartment and one-third abatement on supply of construction services is being availed before levy of tax under the GST Act. 15. Further, it has been submitted by the appellants that their prospective buyers are given an option to opt for car parking space along with the apartment being booked by the customers and accordingly, the customers who opt for availing the car parking facility also, are charged a certain sum towards the car parking space. A customer of a flat may avail car parking facility even after the issuance of completion certificate of the project. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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