GST treatment of water and maintenance charges: separate supply claim under an MOU was rejected as interconnected service arrangements.

The AAR, Haryana examined whether water supplied to individual units under an MOU could be treated as a separate supply from maintenance services for GST purposes. It found that the maintenance arrangement and the water arrangement were not independent in substance, because the materials showed supply through RWA/common storage arrangements rather than a direct stand-alone supply to flats. On that basis, the attempted bifurcation of water charges from maintenance charges was not accepted, and the water arrangement could not be treated as a distinct supply detached from the maintenance services. GST was accordingly applied to the maintenance arrangement.

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Issues: Whether the supply of water to individual units under the MOU was a separate supply from the maintenance services, or whether both arrangements were so interconnected as to form one taxable supply for GST purposes.

Analysis: The Authority found that the maintenance arrangement and the MOU were not independent in substance. The applicant's own materials showed that water was being supplied through the RWA/common storage arrangements and not as a direct, stand-alone supply to individual flats in the manner projected. The Authority relied on the structure of the service arrangements and on the GST treatment of services supplied by a residential welfare association to hold that the attempted bifurcation of maintenance and water charges did not reflect the supply. On that basis, the water arrangement could not be treated as a distinct supply detached from the maintenance services.

Conclusion: The supply of water under the MOU was not accepted as a separate independent supply. GST was held applicable on the maintenance arrangement, and the applicant's attempt to separate water supply from maintenance services failed.

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