TaxTMI 
TaxTMI 
2019 (9) TMI 1478
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.... and parcel of land admeasuring 15,381.37 sq.mtr. situated at Revenue Estate of Village-Dhunela, Sector 33, Tehsil- Sohna, Distt. Gurugram, Haryana. 1.3 AHL has accordingly entered into Flat Buyer Agreements with prospective buyers in the said project. Clause 10.6 thereof provides that the Buyer will enter into a separate maintenance agreement with AHL or its assignee, which would spell out the scope and schedule of maintenance works, operation of the services and maintenance charges/ charges towards capital repairs and replacements. The Buyer further agrees to become a member of the Ashiana Anmol Owner's Association, an association formed for common interest of all intending buyers in accordance with provisions of the Haryana Apartment Ownership Act, 1983. 1.4 Accordingly, after formation of the Association, the Buyers/ Association will enter into Maintenance Agreement with the Applicant, the designated maintenance agency of AHL, to appoint the Applicant for providing the maintenance and management services in respect of common areas and common facilities of the Project. 1.5 Schedule-I of the Maintenance Agreement specifies the scope of work to be ca....
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.... 1.11 As noted, water to individual units is to be supplied by HSVP and as the required infrastructure for such supply is not in place yet, the Maintenance Agreement envisages supply of such water by the Applicant during the intermittent period, for which purpose a separate MOU is to be entered into. 1.12 In this regard, at the outset, the scope of activities carried out by the Applicant under the Maintenance Agreement needs to be ascertained. Attention is invited to Clause 3.1 of the Maintenance Agreement, which provides that the Applicant shall manage, administer and maintain the project and provide the facilities & services as described in Schedule-I thereof. 1.13 Schedule-I lays down the detailed scope of work, where under the Applicant is required to undertake the following activities: Sanitation, Horticulture, Maintenance and operation of water supply, Maintenance and operation of power supply, Civil maintenance, Security, Capital repairs/ replacements, Services of electrician and plumber. 1.14 The charges for the aforesaid activities have been specified in Clause 6 of the Maintenance Agreement. In terms of Clause 6, the buyer is req....
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.... 1.19 In view of above, it is evident that the scope of activities to be undertaken by the Applicant under the Maintenance Agreement extends to operation and maintenance of the project. For such activities to be undertaken by the Applicant, the buyer is obliged to pay maintenance charges along with proportionate costs of water/ electricity used in the common area. However, the activity of water supply to the individual units is a separate activity to be undertaken by the Applicant till creation of infrastructure by HSVP and thereafter by HSVP itself. 1.20 Such supply of water in the individual units is totally independent of and separate from the supply of maintenance services by the Applicant under the Maintenance Agreement. It is for this reason that the Maintenance Agreement itself envisages entering into of a separate MOU for such purposes. Further, such supply of water under the MOU is merely a temporary arrangement, till the required infrastructure for supply of water is created by HSVP. The fact, that such supply is undertaken on a temporary basis, shows that it is not part of the maintenance agreement. 1.21 The recitals of the MOU record the background discus....
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....y independent of and separate from supply of maintenance services under the Maintenance Agreement. 1.28 While such supply of water is to be undertaken by HSVP and not by the Applicant, it is only as an intermittent arrangement that the Applicant will enter into separate MOUs with the buyers for supply of such water during the intermittent period. The supply of water is identifiably separate and distinct from the supply of maintenance services. The parties intend to have such supplies differently. Mere fact of parties to both Maintenance Agreement and MOU being the same does not mean that these are supplied in conjunction with each other. For such reasons, it cannot be said to be naturally bundled with each other. 1.29 Once the Applicant enters into Maintenance Agreement with the buyer, it agrees to provide management and maintenance services to buyers. For the said services, the buyer is obliged to pay specified charges to the Applicant. This is irrespective of supply of water by the Applicant under a separate MOU and for separate prices. 1.30 From nature of the supplies explained above, it is clear that these supplies are neither naturally bundled with each other nor supp....
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.... water cannot be bifurcated when it is being supplied from the same water storage tank. It is clear from the above that the applicant is trying to bifurcate the supply of water into two parts as under:- (i) Supply of water by RWA for maintenance activities; and (ii) Supply of water by RWA for individual flat units 3.5 Now, it is imperative to know the reason behind the above bifurcation being tried by the applicant. It has been observed that, the applicant is involved in two agreements where maintenance agreement provides maintenance services to the Association and MOU is for supply of water to the individual resident residing in the society. 3.6 Further, It has been found that GST on services provided by the Resident Welfare Association to its resident members is 18% when each unit household in a society pays more than Rs. 7500/- per month for said services and the supplier of services (RWA in the present case) is registered by way of crossing over of threshold limit of Rs. 20 lakhs. The relevant portion of the notification No. 12/2017 dated 28.06.2017 is as under:- S. No. Chapter/ Section Heading/ Group or Service Code Desc....
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....eed Rs. 20 Lakh in a financial year, it shall not be required to take registration and pay GST even if the amount of maintenance charges exceeds Rs. 7500/- per month per member. RWA shall be required to pay GST on monthly subscription/ contribution charged from its members, only if such subscription is more than Rs. 7500/- per month per member and the annual aggregate turnover of RWA by way of supplying of services and goods is also Rs. 20 lakhs or more. Annual turnover of RWA Monthly maintenance charge Whether exempt? More than Rs. 20 lakhs More than Rs. 7500/- No Rs. 7500/- or less Yes Rs. 20 lakhs or less More than Rs. 7500/- Yes Rs. 7500/- or less Yes 3.8 In the instant case, it has been found that the applicant is providing services to the RWA in two parts viz. maintenance services and supply of water. It has also been observed that as a general practice across trade and market, the maintenance services is inclusive of supply of water and hence supply of water provided by the applicant through a separate agreement i.e. MOU in the present case, raises a suspicion in its activity. The reason behind the suspicion is that the wate....