Appellant's Parking Charge Recovery Deemed "Supply of Service" Under CGST Act; Value Set at NIL, No GST Payable.

The authority ruled that the appellant's recovery of car parking charges from employees constitutes a "Supply of Service" under the CGST Act. However, the value of this supply is determined to be NIL, as the appellant qualifies as a "Pure Agent" under CGST Rules, subject to specific conditions. Consequently, since the supply value is NIL, no GST is payable, rendering the issue of input tax credit moot.

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Issues Involved:
1. Whether the amount recovered from employees towards car parking charges payable to the building authorities is deemed as "Supply of service" by the appellant to its employees.
2. If deemed as "Supply of service," whether the value of such supply would be NIL, being provided in the capacity of a "Pure Agent." If not NIL, what would be the value of such supplyRs.
3. If GST is payable on the amount recovered from employees, whether the GST paid by the appellant to building authorities towards car parking charges would be admissible as input tax credit against the supply of car parking services to employees.

Issue-wise Detailed Analysis:

1. Supply of Service:
The appellant contended that the facilitation of parking spaces between its employees and the Building Authority does not amount to supply of services under the CGST Act, 2017, as it is not in the course or furtherance of their primary business of software development. The appellant cited Section 7(1) of the CGST Act, which defines "Supply" to include all forms of supply of goods or services made for a consideration by a person in the course or furtherance of business. They argued that their activity does not qualify as a supply because it is not related to their primary business activity.

However, the authority observed that the appellant is providing a right to its employees to use parking facilities, which falls under Schedule II of the CGST Act as a "Supply of Services." The term "easement" was interpreted to mean a right to use someone else's land for a specified purpose, which in this case is the parking space. Therefore, the activity of facilitating parking spaces is deemed as a supply of service.

2. Pure Agent and Valuation:
The appellant argued that if the facilitation of parking spaces is considered a supply, then the value of such supply should be NIL as they act as a "Pure Agent." They referred to Rule 33 of the CGST Rules, which outlines the conditions for qualifying as a pure agent. The appellant claimed that they fulfill all the conditions: they act on authorization from employees, separately indicate the payment in invoices, and do not use the procured services for their own interest.

The authority agreed with the appellant's contention, provided the conditions for a pure agent are met. They noted that the appellant obtains parking facilities on the authorization of employees, the payment is separately indicated, and the services are in addition to their own services. Therefore, the value of the supply would be NIL, subject to the fulfillment of the conditions prescribed for a pure agent.

3. Input Tax Credit:
The appellant contended that if the recovery of parking charges is deemed taxable, then the GST paid to the Building Authority should be available as input tax credit. However, since the value of the supply is determined to be NIL, the question of input tax credit becomes redundant. The authority observed that though the activity is a supply of service, the value being NIL means no GST is payable, and hence the question of input tax credit does not arise.

Ruling:
1. The amount recovered from employees towards car parking charges payable to the building authorities is deemed as "Supply of service" by the appellant to its employees.
2. The value of the supply would be NIL, subject to the fulfillment of the conditions prescribed for a pure agent by the appellant.
3. As the second question is answered in the negative (value being NIL), the question of input tax credit becomes redundant.

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