2020 (7) TMI 200 - AAR - GST

Cooperative housing society activities qualify as 'supply' under CGST Act, 2017

In Re: M/s. Apsara Co-operative Housing Society Limited

In Re: M/s. Apsara Co-operative Housing Society Limited - 2020 (39) G.S.T.L. 206 (A. A. R. - GST - Mah.) , [2022] 106 G S.T.R. 143 (AAR - Mah) Issues Involved:1. Whether the activities carried out by the applicant for its members qualify as 'supply' under Section 7 of the CGST Act, 2017.2. If the activities of the applicant are treated as 'supply' under the CGST Act, 2017, whether the applicant has correctly discharged the GST as per the illustrative copy of the invoice generated by the Applicant.Issue-wise Detailed Analysis:1. Whether the activities carried out by the applicant for its members qualify as 'supply' under Section 7 of the CGST Act, 2017:The applicant, a co-operative housing society, sought an advance ruling to determine if their activities for members qualify as 'supply' under Section 7 of the CGST Act, 2017. The applicant argued that their activities are merely for managing the society and do not constitute 'business' or 'supply' under the GST Act, citing the principle of mutuality. They contended that the society and its members are not distinct persons and hence, no consideration flows between two distinct persons.The jurisdictional officer countered that the applicant and its members are distinct persons under Section 2(84) of the CGST Act, 2017, and the activities carried out by the society, such as managing the property and raising funds, qualify as services provided for consideration. The officer emphasized that the wide definition of 'services' under GST law includes these activities.The Authority observed that the term 'supply' under Section 7 of the CGST Act, 2017, has a broad connotation, including all forms of supply of goods or services for a consideration in the course or furtherance of business. The applicant, being a registered co-operative society, is a 'person' under Section 2(84) of the CGST Act. The membership fees collected from members are considered 'consideration' for the supply of services. The definition of 'business' under Section 2(17) of the CGST Act includes the provision of facilities or benefits by a society to its members for a subscription or other consideration.The Authority concluded that the applicant's activities meet all conditions stipulated for 'supply' under the GST law. The principle of mutuality was found inapplicable in the GST regime, as both the applicant and its members are distinct entities.2. If the activities of the applicant are treated as 'supply' under CGST Act, 2017, whether the applicant has correctly discharged the GST as per the illustrative copy of the invoice generated by the Applicant:The second query was whether the applicant correctly discharged GST as per the illustrative invoice. The Authority examined whether this question falls under Section 97(2) of the CGST Act, which specifies the scope of advance rulings. The Authority found that the question of correct discharge of GST does not pertain to any matters listed under Section 97(2), such as classification of goods or services, applicability of notifications, determination of time and value of supply, admissibility of input tax credit, determination of tax liability, registration requirements, or whether an activity amounts to a supply.Consequently, the Authority held that it does not have jurisdiction to pass a ruling on whether the applicant correctly discharged GST as per the illustrative invoice. The question was deemed not maintainable under the GST Act.Order:1. The activities carried out by the applicant for its members qualify as 'supply' under Section 7 of the CGST Act, 2017.2. The question of whether the applicant has correctly discharged the GST as per the illustrative invoice was not answered due to lack of jurisdiction.