TaxTMI 
TaxTMI 
2021 (11) TMI 266
X X X X Extracts X X X X
X X X X Extracts X X X X
....ices and goods is also INR 20 Lakhs or more. In case of the society, though annual turnover is more than INR 20 Lakhs, monthly maintenance per month per member is less than INR 7,500. But the society also has 68 commercial shops, 233 residential flats and 18 garages. Hence, the society does not contain only residential flats. In view of this please confirm whether the society can stop paying GST and surrender the registration. 2. According to circular number 109/28/2019 GST dated 22Thi July 2019 RWAs are entitled to take ITC on GST paid by them on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary and hardware fittings etc.) and input services such as repair and maintenance services. But as per section 17 (5)(c), ITC shall not be available, when works contract services supplied for construction of immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service. Collective reading of not cation and section 17(5)c), gives contradiction picture to the extent of major repair work carried out with respect to immovable property. Hence, the society wants to understan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xemption of INR 7,500 per member per month as this exemption is applicable to residential unit only. Further, society also collects GST contribution towards major repair fund. The Society does not claim input tax credit on regular expenses such as professional fees, bank charges, insurance premium, stationery items purchased, repair and maintenance, security charges, etc. The society has claimed proportionate ITC once only pertaining to GST charges on major repair bill received from the contractor. B. Statement containing the Applicant's interpretation of law and /or facts I. As per Circular number 109/28/2019 GST dtd 22.07.2019, Resident Welfare Associations (RWA) shall be required to pay GST on monthly subscription contribution charged from its members, only if such subscription is more than INR 7,500 per month per member and aggregate annual turnover of RWA by way of supplying services and goods is also INR 20 Lakhs or more. In case of the society, though annual turnover is more than INR 20 Lakhs, monthly maintenance per month per member is less than INR 7,500. In applicant's view GST should he charged only on Commercial Premises and Residential premises should be ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r month per member then no GST is to be charged by the housing society on the monthly bill raised by the society. Applying above provisions of law - • Applicant society is a cooperative housing society registered on 30.11.1984 having 68 commercial shops, 233 residential flats and 18 garages. • Total maintenance charged by the society exceeded INR 20 Lakhs and hence it obtained GST registration on 16.10.2017. The break-up of maintenance charges are as follows - Particulars Amount (INR) Contribution towards Maintenance 23,76,345 Property tax 17,34,304 Interest on arrears 10,69,304 Parking charges 6,63,556 Central service charges 12,99,600 N A Tax 84,000 Non occupancy charges 44,846 Change of use of charges 1,18,127 Total 73,90,082 Our argument - * Though total collection received by way of contribution from members is more than INR 20 Lakhs, contribution towards maintenance per member per month is less than INR 7,500. Hence, the society is not liable to register under GST law. Society should be allowed to surrender GST registration. * Vishal CHS is &#....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r work for maintenance of society which is service provided by the society to its members. Hence the society should be allowed to claim ITC for major repair work carried out for buildings as it is for the furtherance of business of the society. * Though society claims benefit of exemption of INR 7,500 as explained above, the society should be allowed to claim input tax credit on regular repair and maintenance work and for procuring capital and other goods. Irrespective of nature of expenditure incurred whether capital or revenue, benefit of input tax credit should not be denied to the society. 2.6 Point number 3 - Claiming Input Tax Credit Relevant legal provisions - * As per Circular number 109/28/2019 GST dt 22.07.2019 RWAs are entitled to take ITC on GST paid by them on capital goods (generators, water pumps, lawn furniture etc.), goods (taps, pipes, other sanitary and hardware fittings etc.) and input services such as repair and maintenance services. * According to section 17(2) read with rule 42 and 43 of CGST Rules 2017, where goods or services are used partly for effecting taxable supplies and partly for exempt supplies then the amount of cre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n this case the taxpayer being registered can file application for cancellation of registration under section 29 of GST Act being no longer liable to be registered under section 22 to and 24 of the GST Act. The proper officer can cancel the registration as per the application filed by the taxpayer, after due verification. Hence the subject application is not maintainable u/s 97 of CGST/MGST Act 2017, hence application may be rejected. 3.5 Question raised by taxpayer (1) - Surrendering of GST registration * In view of applicant's submissions, it is to submit that, Total maintenance charges includes the receipt of Interest or arrears, parking charges and central service charges, non-occupancy charges and change of use of charges, the said charges are taxable under GST statute. It means the taxable receipt due to other receipts has exceeded the turnover limit INR 20 Lakhs and hence TPs Registration is not required to be cancelled under the GST. In view of the above fact, it is to submit that, other than maintenance receipt is taxable under the GST statute. And TP is required to pay taxes under GST statute. The intention of the 'housing society' is only for resi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n MGST / CGST Act, the housing society is required to obtain registration and pay GST in case of supply of Goods / services to members or non-members as the case may be if required threshold is crossed in terms of turnover of supply. The housing society and its members are "distinct entities or distinct persons" under MGST / CGST Act as per provisions of GST Act. ITC is a concession & always subject to condition & negative list. (Refer Hon. Supreme Court decision in case of M/s TVS Motors Company Ltd v/s State of Tamil Nadu, dt. 12/10/2018 in CA 10560 -10564 of 2018) 04. HEARING 4.1 Preliminary hearing in the matter was held on 22.01.2020. Shri Ulhas Gumaste, CA and Shri. Uday Gumaste, CA appeared, and requested for admission of the application. Jurisdictional Officer Shri. K. R. Bodkhe, learned Deputy Commnr, E-701, Nodal-7 and Shri. Sachin L. Jadhav, learned STO, C-713, Nodal-7 also appeared. 4.2 The application was admitted and posted for final e-hearing on 24.08.2021. The Authorized representatives of the applicant, Shri. Ulhas Gumaste, CA was present. The Concerned officer Shri. Pradeep Sharma, STO, MUM-VAT-C-713, Nodal 7 was also present. The Authorized representativ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mination of time and value of supply of goods or services or both; d. admissibility of input tax credit of tax paid or deemed to have been paid; e. determination of the liability to pay tax on any goods or services or both,. f. whether applicant is required to be registered; g. whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. 5.3.3 We observe in the instant case, the question which has been raised by the applicant is not pertaining to any of the matters mentioned in Section 97 (2) of the CGST Act. In other words, Section 97(2), which encompasses the questions, for the ruling by this Authority does not deal with the issue of whether a GST registration should be surrendered. Hence, it is held that this authority does not have jurisdiction to pass any ruling on such matters. 5.3.4 In view of the above discussion, we reiterate that, the question posed before us does not pertain to matter in respect of which an Advance Ruling can be sought under the GST Act. In view thereof, we find that the first quest....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 5.4.5 In view of above, input tax credit generally is not available for construction, reconstruction, renovation, addition, alteration or repair of an immovable property even when such goods or services or both are used in course or furtherance of business. However, the limitation in such a situation is to extent of capitalization. The activity of repair and maintenance which encompasses supply of goods for a construction activity is of immovable nature. The provisions of ITC for the said supply of goods is covered under Section 17(5)(d) read with explanation mentioned therein. Therefore, ITC on GST paid on such goods as mentioned above will not be available to the extent of capitalisation on account of construction service in respect of the concerned immovable property as mentioned in Explanation of Section 17(5) of the CGST Act, 2017. 5.4.6 The applicant is engaged in club or association supply of service as a business and the construction service is used for furtherance of the said business. Thus the supply rendered by the applicant is also covered under Section 17(5)(d) read with explanation mentioned therein. ITC on GST paid on such supply of service as mentioned above wil....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uch of the input tax as is attributable to the said taxable supplies. 06. In view of the above discussions, we pass an order as follows: ORDER (Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) For reasons as discussed in the body of the order, the questions are answered thus - Question.1. According to circular number 109/28/2019 GST dated 22^nd July 2019, Resident Welfare Association (RWA) shall be required to pay GST on monthly subscription contribution charged from its members, only if such subscription is more than INR 7,500 per month per member and aggregate annual turnover of RWA by way of supplying services and goods is also INR 20 Lakhs or more. In case of the society, though annual turnover is more than INR 20 Lakhs, monthly maintenance per month per member is less than INR 7,500. But the society also has 68 commercial shops, 233 residential flats and 18 garages. Hence, the society does not contain only residential flats. In view of this please confirm whether the society can stop paying GST and surrender the registration. Answer: - Not answered in view of discussions made above. Ques....