TaxTMI 
TaxTMI 
2020 (11) TMI 489
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....vely] by M/s. Apsara Co-operative Housing Society Ltd., N.C.P.A. Complex, Nariman Point, Mumbai-400021 (herein after referred to as "the Appellant") against the Advance Ruling No. GST-ARA-21/2019-20/B-34 dated 17.03.2020 = 2020 (7) TMI 200 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, passed by the Maharashtra Authority for Advance Ruling (hereinafter referred to as the MAAR). BRIEF FACTS OF THE CASE 3.1 The Appellant is a Co-operative Housing Society, registered under the Maharashtra State Co-operative Society Act 1960.The main objects of the Appellant as per the By-laws are enumerated as under: (a) To obtain the conveyance from the promoter, in accordance with the provision of the Ownership Flats Act and the Rules made thereunder, of the right, title and interest, in the Land with buildings thereon; (b) To manage, maintain and administer the property of the Society; (c) To raise funds for achieving the objective of the Society; (d) To undertake and provide for, on its own account or jointly with Co-operative Institution, social, cultural, or recreative activities; (e) To do all things necessary or expedient for the attainment of t....
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....Appellant, it was held by the MAAR that the same cannot be answered in terms of Section 97(2) of the CGST Act, 2017, as this question, asked by the Appellant, is not covered under Section 97(2) of the CGST Act, 2017, which encompasses the set of questions, in respect of which an Advance Rulings can be sought by the Appellant under the CGST Act, 2017. 3.9 Being aggrieved by the aforesaid Advance Ruling passed by the MAAR, the Appellant has filed the present appeal before this Appellate Authority for Advance Ruling. GROUNDS OF APPEAL 4, The Appellant in its Appeal has, interalia, mentioned the following grounds of Appeal: 4.1 The Advance Ruling Order has been passed without considering all the submissions made by the Appellant, which inter alia included Hon'ble Supreme Court Judgement dated 3rd October, 2019 in the case of State of West Bengal & Ors. Vs. Calcutta Cub Limited in Civil Appeal No.4184 of 2009 = 2019 (10) TMI 160 - SUPREME COURT, which was directly relevant to the subject case. The said Apex court judgement, though noted by the Authority, was not discussed in the order. 4.2 The Appellant have further contended that the Advance Ruling Authority have based t....
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....ce the same would also not be construed as "Consideration". Therefore, the said Society charges would not be subject to GST. 4.6 The Appellant have further contended that they cannot be said to be doing business or supplying any goods or services to its members in view of the Principle of Mutuality in light of the Hon'ble Supreme Court Judgement dated 3rd October, 2019 in the case of State of West Bengal & Ors. Vs. Calcutta Cub Limited in Civil Appeal No.4184 of 2009 = 2019 (10) TMI 160 - SUPREME COURT, wherein the Hon'ble Apex Court held that services by a member's club to its members would amount to services to itself, and hence would not qualify as service as defined under the Finance Act,1994. It has further been submitted by the Appellant that the definition of the services under the erstwhile, the Finance Act, 1994 is essentially the same as supply of services as understood under the CGST Act, 2017. Hence, the ratio of the aforesaid Apex Court Judgement would clearly be applicable to the present case. Accordingly, the activities carried out by the Appellant would not qualify as "Supply", and hence would not attract GST. 4.7 The Appellant have placed reliance on various ....
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....he Appellant, the Respondent has submitted that the matter, in the aforesaid case, pertains to sales tax regime wherein the concept of the term "supply" was not prevalent. Therefore, the ratio of the said Apex Court judgement will not be applicable. 5.2 that the Appellant is a service provider/supplier. The word "Supply", under the CGST Act, is crucial and significant, as it has got very wide connotation due to the presence of the clause "all forms of supply of goods or services or both". 5.3 that on perusal of the above definition of the term "business", it can clearly be concluded that the said term has wide meaning and the performance of various activities by the Appellant for the benefit of its members stands covered under the term "business." 5.4 that the Appellant collects fees from their members on monthly or quarterly basis by issuing invoices for attainment of various objects of their society as enumerated in their society By-Law, and is nothing but "business" as provided under Section 2(17) of, the CGST Act, 2017. The contention, put forth by the Appellant, that it does not receive any subscription or consideration and no facilities or benefits are provided, is d....
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....assing any ruling on the question pertaining to the correctness of GST in the illustrative invoice, put forth by the Appellant in the Advance Ruling application filed by them, the Respondent has submitted that Section 97(2) Clause (e) specifically covers determination of the liability to pay tax on any goods or services or both but does not cover the quantification or the modalities or the methodology to compute it. Thus. there is no error in the order passed by MAAR in holding that the said question cannot be answered. PERSONAL HEARING 6. A personal hearing in the matter was held on 22.10.2020, which was attended by Shri Rahul Thakkar, Advocate, as the representative of the Appellant, and Shri Vinod Nautiyal, Assistant Commissioner, in the capacity of the Respondent/Jurisdictional Officer in the subject appeal. 6.1 During the Course of the said personal hearing, Shri Thakkar, reiterated the earlier submissions filed before us. He primarily relied upon the ratio laid down by the Hon'ble Supreme Court Judgement dated 3rd October, 2019 in the case of State of West Bengal & Ors. Vs. Calcutta Cub Limited in Civil Appeal No.4184 of 2009 = 2019 (10) TMI 160 - SUPREME COURT, and ....
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....tax and service tax laws prevalent in India prior to introduction of GST. (iii) That it is settled law that the Notifications and Circulars issued under the parent act cannot go beyond the charging provision or the taxable event; that merely because there is an entry under the Exemption Notification or a Circular issued by CBIC does not make a transaction as deemed supply under the CGST Act, 2017. (iv) That the reliance in this regards has been placed on the judgment of Hon'ble Supreme Court in the case of Laghu Udyog Bharti and Others Vs. Union of India and Others - (1999) 6 SCC (418) (SC) = 1999 (7) TMI 1 - SUPREME COURT wherein the attempt of the Government to affix the liability to pay the service tax on recipient of GTA and Clearing and Forwarding services by way of amendment in Rules was struck down by the Hon'ble Court as being ultra vires the charging Section in Section 66 of the Finance Act, 1994. (v) That the definition of 'service' provided under Section 65B (44) of the Finance Act, 1994 has been considered and interpreted by the various High Courts and Hon'ble Supreme Court to hold that the transaction between society and its members or member....
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....nses is factually incorrect. The Revenue in their contention has merely made assumptions that the part of the society charges is collected towards facilities and benefits provided to the society without actually identifying the facilities or benefits provided by the Society to its members. (x) That, in the present case, the Appellant has sufficiently proved that the Appellant is utilizing the charges collected from members for meeting the administrative expenses only. As against this, the Revenue has failed to the show any utilization of the charges for other than administrative expenses. (xi) That the question of whether a society and its members are distinct persons has been settled by the Hon'ble Supreme Court in catena of decisions. In this regard, the reference has been made to the Hon'ble Supreme Court judgment in the case of Income Tax Officer Vs. Venkatesh Premises Co-operative Society Limited (2018) 15 SCC 37 (SC) = 2018 (3) TMI 675 - SUPREME COURT. (xii) That the similar question has been decided by the Hon'ble Calcutta High Court in the case of Saturday Club Ltd. Vs. Assistant Commissioner, Service Tax Cell (2005) 180 ELT 437 (Cal HC) = 2004 (6....
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....017. 9. At the outset, we would like to visit the nature of the activities carried out by the Appellant, which are mentioned in the By-laws of the Appellant Society. They are being reproduced herein under: (a) To obtain the conveyance from the promoter, in accordance with the provision of the Ownership Flats Act and the Rules made thereunder, of the right, title and interest, in the Land with buildings thereon; (b) To manage, maintain and administer the property of the Society; (c) To raise funds for achieving the objective of the Society; (d) To undertake and provide for, on its own account or jointly with Co-operative Institution, social, cultural, or re-creative activities; (e) To do all things necessary or expedient for the attainment of the objects of the Society, specified under the Bye-laws. 10. On careful consideration of the aforementioned activities performed by the Appellant, it is amply revealed that the activities performed by the Appellant are entirely oriented towards providing facilities, benefits or convenience to its members, whether it is obtaining the conveyance of the right, title or interest from the promoter,....
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....sal made or agreed to be "made for a consideration by a person in the course or furtherance of business." 12. Now, to understand the term "supply", we need to refer to the term "service", the meaning of which is provided under Section 2(102) of the CGST Act, 2017. The relevant portion of the said term is reproduced herein under: "service" means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged; 13. Thus, on perusal of the above definition of the term -service", it is adequately clear that the term -service" under the CGST Act, 2017 has been rendered a very wide connotation, which is evident from the presence of the expression "anything other than goods, money and securities". In view of this, it is clear that the activities undertaken by the Appellant would rightly be covered under the scope of the term "service". Now, we would examine the term "business" defined under Section 2(17) of the CGST Act, 2017, the relevant portion of which is being....
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....ccordingly will be liable for GST. 15. As the judgement of the Hon'ble Supreme Court in the case of Calcutta Club (cited supra) has been time and again extensively quoted by the Appellant, we find it necessary to discuss it elaborately. A careful reading of the said judgement in the case of Calcutta Club (cited supra) shows that there are major differences in the provisions existing under the West Bengal Sales Tax Act and the Service Tax Act under the provisions of which the judgement is given. The definition of 'deemed sales' under the Sales Tax laws was borrowed from the 46th Amendment in the Constitution which enacted Article 366 (29-A) of the Constitution. The Article 366 (29-A) (e) says the following:- (e) A tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration.' The Hon'ble Supreme Court has referred to the Statement of Objects and Reasons which led to the 46th Amendment to see whether the doctrine of mutuality propounded in the judgement in the case of Young Men Indian Association has been done away with by the 46th Amendment. The Statement of Objects and R....
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....r association contained in Section 65(25a) of the Finance Act, 1994 which sought to tax 'services by a person of body of persons to its members, expressly excluded 'clubs established or constituted by law i.e. incorporated clubs. Therefore, the Hon'ble Court concluded that incorporated clubs were specifically excluded from taxation under the Finance Act. After the amendments w.e.f. 1^st July 2012, the Legislature sought to correct the situation and the definition of 'person' was expanded to include an association of persons or body of individuals whether incorporated or not.' Therefore, incorporated clubs were brought under the tax net. But an explanation - Explanation 3 to Section 65 of the Finance Act, was inserted which defined 'taxable service' to Include any taxable service provided or to be provided by any unincorporated association or body of persons to a member thereof, for cash, deferred payment or any other valuable consideration'. By comparing this definition to the Article 366 (29-A) the Apex Court observed that though an explanation was added, it contains the words 'unincorporated association or body of persons' and the term 'body of persons' does not include a body co....
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.... we would say that the judgement helps the case of the revenue. The Supreme Court has referred as examples to the provisions of the Income Tax Act to show how a deeming fiction can be introduced to tax profits and gains made by a mutual insurance company and capital gains arising from a transfer by way of conversion by the owner of a capital asset despite the fact that there is no transfer in law by the owner of a capital asset to another person. By contrasting these provisions of the Income Tax Act with those of Article 366 (29-A) it again reiterated that the said Article does not do away with the principle of mutuality. However, such is not the case now. The provisions under the CGST law -definition of 'person', 'business' and 'supply' are now self-contained, unqualified and wide enough to include the supply by both-incorporated and unincorporated clubs to its members and by their extensiveness completely does away with the principal of mutuality. 19. As regards the Hon'ble Calcutta High Court Judgement in the case of Saturday Club Limited Vs. Asstt. Commissioner, Service Tax Cell, Calcutta & Ors. (2005) 180 ELT 437(Cal HC) = 2004 (6) TMI 11 - HIGH COURT CALCUTTA, and the Hon'....
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....re of the consideration. The society maintains the premises, looks after the day to day maintenance of - lifts, stairwell, security, car parking, manages the staff/ property in order to ensure the smooth functioning and charges for it. It cannot be therefore said that no services are provided. 21. As regards the Appellant's contention that a particular transaction, which cannot be considered as business under the Income Tax law, cannot be considered as business even under the GST law is not acceptable as the definition of the term 'business' provided under the CGST Act, 2017 is much wider than the definition of the term 'business' provided under the Income Tax Act, 1961. Therefore, any law declared by any Hon'ble Court under the Income Tax Act,1961 is not compulsorily applicable even under the CGST Act, 2017. 22. We would also like to explore the intention of the legislature on this aspect as to whether the society charges are liable to GST or not. For this purpose, we would refer to the clause (c) of Sl. 77 of the Notification No. 12/2017-C.T. (Rate), dated 28.06.2017 as amended by the Notification No. 2/2018-C.T. (Rate), dated 25.01.2018, which stipulates that the service b....