TaxTMI 
TaxTMI 
2021 (7) TMI 591
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....titioner in W.P.No.27100 of 2019 challenges an order of the Authority for Advance Ruling (AAR) levying tax on the entirety of the contribution by him to a RWA and the petitioners in W.P.Nos.5518 and 1555 of 2020 and 30004 of 2019 challenge Circular No.109/28/2019 dated 22.07.2019, also on the same issue. 3. We are concerned with the period post 01.07.2017 when the Goods and Services Tax Act, 2017 (GST Act) was introduced. With the onset of GST, various services in respect of which GST was to be levied and collected came under the scanner. Exemptions were granted under Notification 12/17CT dated 28.06.2017. The Circular to the extent to which it is relevant, is extracted below: Exemption from CGST on specified intra-State services. In exercise of the powers conferred by sub-section (1) of Section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts the intra-State supply of services of description as specified in column (3) of the Table below from so much of the central tax leviable thereon under sub-s....
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.... was followed by all RWAs consistently in the collection of contributions and levy of GST thereupon. 6. While this is so and this method was being followed from 2017 till 2019, one of the petitioners, ie.,. W.P.No.27100 of 2019 approached the AAR seeking clarification in regard to this issue. The AAR, by impugned order dated 21.06.2019, held adverse to it stating that the grant of exemption was conditional upon the contribution being an amount of Rs. 7,500/- or less. If the contribution exceeded the sum of Rs. 7,500/-, then the very entitlement of that RWA to exemption would stand defeated and the entirety of the amount collected would have to be brought to tax. 7. The relevant portion of the ruling of the AAR is as follows: RULING If a service by the applicant, a registered housing society/resident welfare association to its members by way of reimbursement of charges or share of contribution for sourcing of goods or services from a third person for the common use of its members, is such that it is above 7500 rupees per month effective from 25.01.2018 (5000 rupees before), it is not eligible S No 77 (c) of Notification No. 12/2017-C.T. (Rate) dated 28.06.2017 as a....
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....titution of India, as per which 'law' would include any Ordinance or Bye law, Rule, Regulation, Notification, custom or usage, excluding Circulars. Thus the withdrawal of a statutory exemption by way of a Circular is contrary to the provisions of the Constitution. 11. Based on the aforesaid clarification initially issued by the Department, the petitioner RWAs have been collecting tax only on that component of the contribution that exceeds Rs. 7,500/-. They urge that if a contrary view were to be taken at this juncture, it would be impossible for the Associations to collect the shortfall as there would have been several changes in ownership of the property, in the interim. 12. Learned Senior Standing Counsel appearing for the revenue would stress on the provisions of Section 15 of the GST Act, as per which, it is the transaction value that is liable to GST. The transaction value in this case is represented by the contribution made and it should, in entirety, be taken into account for the purpose of levying tax. She points out that the exemption is intended for the middle class and not for luxury apartments/their owners. 13. She compares the provisions of the Tamil Nadu Addi....
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....reting the same. 17. The intention of the Circular appears clear, that is, to grant exemption in regard to the receipts from services that answer to the description set out therein. The description of the services is also clear, that is, services to the members of an unincorporated body or non-profit by way of reimbursement of charges or share of contribution upto an amount of Rs. 7,500/- in the sourcing of goods or services from a third person for the common use of its members. No ambiguity presents itself on a plain reading of the Entry and the intention is clear, so as to remove from the purview of taxation contribution upto an amount of Rs. 7,500/-. 18. Let me compare the Entry in question with other entries granting exemptions. The difference in language is emphasized in bold. (i) SSI Exemption Notification No. 8/2003 C.E. dt. 01.03.2003. In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) (herein after referred to as the Central Excise Act) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 8/2002-Central Excise, dated the....
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.... 25/2012 ST Dt.20.06.2012. Notification No. 25/2012-Service Tax dated- 20th June, 2012, as amended. Incorporating changes made till issuance of notification no 10/2017-Service Tax dated 8-3-2017 G.S.R. 467(E).- In exercise of the powers conferred by subsection (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Act) and in supersession of notification number 12/2012- Service Tax, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 210 (E), dated the 17th March, 2012, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the following taxable services from the whole of the service tax leviable thereon under section 66B of the said Act, namely:- 30. Services by way of carrying out,- (i) any process amounting to manufacture or production of goods excluding alcoholic liquor for human consumption; or ........ (d) processes of electroplating, zinc plating, anodizing, heat treatment, powder coating, painting including spray painting or auto black, during the cou....
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....ading of the above extracts would indicate the difference in language adopted by the revenue in the matter of grant of exemptions. In a case where legislature intended that the exemption shall apply only to cases where the amount charged does not exceed a specified pecuniary limit, it states as much, as can be seen from the language deployed in the proviso to Clause 56 in Notification 25 of 2012 where it is stated 'the exemption shall apply only where the gross amount charged for such service does not exceed Rs. 5,000/- in a financial year'. 20. Then again in Notification No.12/2017 dated 28.06.2017, Entry 78, dealing with services rendered by an artist reads thus: (1) (2) (3) (4) (5) Sl.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of services Rate (per cent.) Condition 1 ......... 78 Heading 9996 Services by an artist by way of a performance in folk or classical art forms of- (a) music, or (b) dance, or (c) theatre, if the consideration charged for such performance is not more than one lakh and fifty thousand rupees: Provided that the exemption shall not apply ....