2019 (7) TMI 96 - AAR - GST

Gaming zone in Oberoi Mall not classified as amusement park, subject to 28% GST rate

In Re: M/s. Bandai Namco India Private Limited

The Authority for Advance Ruling (AAR) held that the gaming zone operated by Bandai Namco India Private Limited (BNIPL) in Oberoi Mall, Mumbai, does not ... Rate of GST - services by way of admission to amusement parks and amusement facility - it is submitted that the GST Notification 1/2018 reduced the rate on services by way of admission to amusement parks from 28% to 18% with effect from 25 January 2018 - what will be the applicable rate of GST on the services/ activities of the Company? - HELD THAT:- From the meaning assigned to 'Amusement Park', we understand and we agree with the contention of the jurisdictional officer that park includes a large area of land that is used for specific purpose in a big open area containing various amusement facilities which themselves may be under covered premises - In the present case, we find that applicant have stationed various gaming equipment and machine for different age groups consisting of kids, teenagers and adults. The equipments and machine are either coin operated or card operated. Thus through the various equipment and machine stationed in the mall applicant allows interested person such as kids, teenagers and adults facilities to enjoy various games. The word ‘amusement’ being common in the expressions ‘amusement park’ and ‘amusement facility’ it is worthwhile to know the difference between a ‘park’ and a ‘facility” to arrive at a conclusion as to whether the Applicant’s premises is an ‘amusement park’ or an amusement facility’. The meaning of a ‘park’ in various dictionaries say that a park is a ‘large of land’ used for a particular purpose - In the instant case the applicant has placed equipments in an area within the Oberoi mall. Therefore there is should not be a second thought to call it an ‘amusement facility’ rather than an ‘amusement park’. Applicant are engaged in providing amusement facility services and running family entertainment center in Oberoi Mall. Applicant is also advertising its activities in the public domain as providing amusement facilities - the subject services/activities supplied by applicant by deploying gaming machines and equipments would not fall within the expression, as an ‘amusement park’, but fall under amusement facilities. The GST rate on operating gaming zone in one of leading malls in Mumbai is @ 28% w.e.f. 25.1.2018. Issues Involved:1. Applicable GST rate on operating a gaming zone in a mall.2. Classification of the gaming zone as an amusement park or an amusement facility.3. Interpretation of relevant GST notifications and definitions.Issue-wise Detailed Analysis:1. Applicable GST Rate on Operating Gaming Zone in a Mall:The applicant, Bandai Namco India Private Limited (BNIPL), sought an advance ruling on the applicable GST rate for operating a gaming zone in Oberoi Mall, Mumbai. Before the GST implementation, BNIPL paid service tax and entertainment tax. Post-GST, the company was liable to pay GST at 28% as per Notification 11/2017-Central Tax (Rate). However, with Notification No. 01/2018-Central Tax (Rate) dated 25 January 2018, the GST rate for certain amusement services was reduced to 18%. BNIPL argued that their services should fall under the reduced rate category.2. Classification of the Gaming Zone as an Amusement Park or an Amusement Facility:BNIPL contended that their gaming zone should be classified as an amusement park, which would qualify them for the reduced GST rate of 18%. They referenced the Bombay Entertainment Act's definition of an amusement park and argued that their facility, which includes various gaming machines and equipment for different age groups, aligns with this definition. They also cited the Fitment Committee’s comments and the press release from the 25th GST Council meeting, which indicated a reduction in GST rates for amusement parks to benefit children and promote social wellness.3. Interpretation of Relevant GST Notifications and Definitions:The Authority for Advance Ruling (AAR) examined the relevant GST notifications and definitions to determine the appropriate classification and GST rate. The original Notification 11/2017-Central Tax (Rate) listed services by way of admission to amusement parks and amusement facilities under a single entry with a 28% GST rate. However, Notification No. 01/2018 split these into two separate entries: one for amusement parks at 18% and another for amusement facilities at 28%.The AAR compared the definitions and concluded that the term 'amusement park' implies a large area with various attractions, whereas BNIPL's gaming zone is a smaller, enclosed space within a mall. The AAR noted that the gaming zone offers a singular attraction (gaming machines) rather than the multitude of attractions typically found in an amusement park.Conclusion:The AAR determined that BNIPL's gaming zone does not qualify as an amusement park but rather as an amusement facility. Consequently, the applicable GST rate for operating the gaming zone in Oberoi Mall, Mumbai, remains at 28%, as per the amended Notification No. 01/2018-Central Tax (Rate).Order:The GST rate on operating the gaming zone in one of the leading malls in Mumbai is 28% w.e.f. 25.1.2018.