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2023-TIOL-104-AAR-GST
Palal Realty
GST - Applicant is liable to pay GST at the rate of 1.5% [0.75% - CGST + 0.75% - SGST] in respect of the services of construction of affordable residential apartments as per entry at Item (i) and at the rate of 7.5% [3.75% - CGST + 3.75% - SGST] in respect of the services of construction of residential apartments other than affordable residential apartments as per entry at Item No. (ia) of Sl. No. 3 of Notification No. 11/2017 -CTR subject to the conditions prescribed - The taxable value of the construction services supplied by the applicant shall be governed by the provisions of Para 2 of Notification No. 11/2017 -CTR as amended by Notification No. 03/2019 -CTR and accordingly the applicant is eligible to avail deduction of one-third of the total amount charged for the supply in arriving at the taxable value of the supply - Amount charged by from the villa buyers for some structural changes to add some additional area or undertake interior works etc. carried out before completion of the construction shall form part of the total amount charged for the supply as defined in explanation to Para 2 of Notification No. 11/2017 -CTR and accordingly will be liable to GST at the same rate as specified in Item Nos. (i) and (ia) of the said notification subject to the conditions prescribed therein: AAR
- Application disposed of: AAR
2023-TIOL-103-AAR-GST
Choice Foundation
GST - Applicant proposes to enter into a joint venture agreement with Choice Estates and Constructions Pvt. Ltd. [CECPL] with the intention to combine the individual expertise of the applicant and CECPL for the joint operation of an educational institution on the Property - Applicant seeks a ruling on the following questions viz. (1) vis-a-vis the applicant, who would be the recipient of service in the proposed joint venture?; (2) vis-a-vis Choice Estates and Constructions Private Limited, who would be the recipient of service in the proposed joint venture?; (3) Whether the amount which would be paid by the students to the educational institution proposed to be jointly operated by the applicant and Choice Estates and Constructions Pvt Ltd by way of the proposed joint venture would be liable to GST?; (4) Whether the applicant's share in revenue from the educational institution would be liable to GST?; (5) Whether Choice Estates and Constructions Pvt Ltd.'s share in revenue from the educational institution would be liable to GST? and (6) Whether the interest free refundable deposit proposed to be made by the applicant with Choice Estates and Constructions Private Ltd (CECPL) would be liable to GST?
Held: No ruling can be given on the questions (1), (2), (3) & (5) as the same does not fall under the purview of any of the clauses of s.97(2) of the Act, 2017 - Insofar as question number (4) is concerned, the service supplied by the applicant to the educational institution i.e., the joint venture is liable to Goods and Services Tax as per Notification No. 11/2017 -Central Tax (Rate) - As regards, question no. (6), services by way of extending interest free refundable deposit constitutes a supply under the Act, 2017 but same is exempted from GST as per notification 12/2017 -CTR - Application disposed of: AAR
- Application disposed of: AAR
2023-TIOL-102-AAR-GST
Best Money Gold Jewellery Ltd
GST - Applicant is engaged in the business of buying and selling old/used/second-hand gold jewellery/ornament from unregistered persons - In the above scenario, Applicant seeks a ruling on the following question viz. if at the time of sale of such goods "as such" there is no change in the form/nature of such goods and ITC is also not availed on such purchase, whether GST is to be paid only on the difference between the selling price and purchase price as stipulated u/r 32(5) of the Rules, 2017.
Held: The crucial aspect to be examined is whether gold is a commodity whose/ which value changes when the owner ship changes - Normally, value of gold will not diminish even if it is exchanged among 10 different users in a span of 2 years as a jewellery piece of 22 carats remains 22 carats even after changing hands - Content, Carat (purity) and fineness determine the value of gold jewellery and not the duration of use or holding - Since the duration of use does not affect the value of the commodity in question, the concept of depreciation is not applicable in the case of gold and gold jewellery - By the same logic, dealing with exchange of gold cannot be construed as dealing in second-hand goods and the rule 32(5) is not applicable and Section 15 of the CGST Act 2017, holds good - The term ‘second hand' does not hold any meaning when it comes to items such as gold, land, currency etc. - In order to qualify for inclusion under the valuation of supply as envisaged under sub-rule (5) of rule 32, it has to be proved that the applicant is dealing in second-hand goods - Unfortunately, gold in any form fails to pass the test of ‘second-hand goods' - Supply made by the applicant fails to comply with all the requirements specified under Rule 32(5) of the CGST, Rules 2017 - Hence, the applicant cannot determine the value as per Sub Rule 5 of Rule 32 of the CGST, Rules 2017 : AAR
- Application disposed of: AAR
2023-TIOL-20-AAAR-GST
Kothari Sugars And Chemicals Ltd
GST - AAR held that recovery of nominal amount from the employees for making payment to the third party service provider, providing food in canteen as mandated in the Factories Act, 1948 would attract tax under GST - Aggrieved, an appeal has been filed.
Held: In the instant case, the Appellant had established canteen in their premises and has been bearing a part of the cost for providing the food/beverages to their employees and a part of the cost is being collected from employees, as fixed by the Managing Committee - The supply of the food/beverages, although at subsidised rates, by the Appellant/employer to their employees is certainly an activity amounting to supply of service and attracts levy of GST on that part of the consideration being charged for such supply - He ld that there is no case to deviate from the decision of the Authority for Advance Ruling of Tamil Nadu, vide AAR No. 20/AAR/2022 dated 31.05.2022 - 2022-TIOL-81-AAR-GST against which the present appeal was filed - Appeal rejected: AAAR
- Appeal rejected: AAAR
2023-TIOL-19-AAAR-GST
Coral Manufacturing Works India Pvt Ltd
GST - AAR held that Input Tax Credit of GST paid on Steel, cement and other consumables are not available - Insofar as eligibility to credit of GST paid on structures, Pre cast, reinforced concrete beams, poles etc. (purchased as it is) and other capital goods is concerned, the same are not answered as the question is not substantiated with factual documents - Aggrieved, the appellant is before the Appellate authority.
Held: Examination of the photographs and the averments made by the appellants would reveal that the factory premises have been constructed with large numbers of pillars, gantry beams with support mountings across the length and breadth, rails with a view to install and operate the overhead cranes - But the pillars and beams are found to be commonly erected as structurals to bear the weight of overhead crane as well as to support the walls and roofs constructed alongside such pillars - Thus, there are two purposes of the pillars & beams involved in the construction of factory building, one relates to structural support to move the overhead crane and other one to support side walls and roof of the Integrated factory building premises to protect it from outside environment - CGST Act, 2017 states that “plant and machinery” means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but exclude land, building or any other civil structures - Therefore, the structural support erected in relation to overhead crane alone would be covered under the extended meaning of plant and machinery - Integrated factory building per se is not to be categorized as plant and machinery - The overhead crane and its proportionate structural support would be categorized as plant and machinery as per the explanation to Section 17 of the TNGST Act, 2017 - Such structural support would not fall under the category of blocked input tax credit - Hence the appellant would be eligible for input tax credit proportionate to the extent of structural support erected in relation to overhead crane alone subject to fulfilment of conditions stipulated in section 17(5)(c) and (d) of the CGST Act, 2017 and explanation thereunder - However, they are not eligible for input tax credit relating to construction of other civil structure like side walls, roof of the Integrated factory building - Held, therefore, that the appellants are entitled to the eligible ITC on overhead rails and gantry beams laid exclusively for the purpose of movement of overhead crane - appellants are entitled to proportion of eligible ITC in respect of structural support for overhead crane by applying the ratio of Load transferred by overhead crane, railings and gantry beams to the pillars and beams to the total load including roof, walls etc., whose load are transferred to the pillars and beams of the integrated factory building - However, they are not eligible for input tax credit relating to construction of other civil structure like side walls, roof of the Integrated factory building - The appeal is allowed and orders of the AAR is modified to the extent indicated above: AAAR
- Appeal disposed of: AAAR |
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