TaxTMI 
TaxTMI 
2023 (4) TMI 155
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....pp Suraj Water Park, Kavesar Ghodbunder Road Thane, 400615. ("hereinafter referred to as "the Appellant") against the Advance Ruling No. GST-ARA-68/2019-20/B-52 dated 27.08.2021 pronounced by the Maharashtra Authority for Advance Ruling (hereinafter referred to as "MAAR"). 3. FACTS IN BRIEF. 3.1. M/s. Puranik Builders Limited, having its corporate office at Puranik One Kanchanpushp Complex Opp. Suraj Water Park, Kavesar Ghodbunder Road Thane, 400615, is, inter-alia, engaged in the business of construction and sale of residential apartments, wherein the appellant discharges Goods and Services Tax (GST) in respect of supply of construction of residential apartments sold prior to receipt of the Occupancy / Completion Certificate. The Appellant has obtained registration and holding valid registration certificate issued under CGST Act, 2017. 3.2. The terms of sale of an under construction residential apartments by the Appellant are governed by an "Agreement for Sale" entered between the Appellant and the customers, which upon completion of construction is supplemented by a sale deed. 3.3. The construction services provided by the appellant are classified under SAC code 9954 ....
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.... formation of society, any unspent amount is transferred to the society 6 Development charges Additional charges for development of the project computed based on premium paid to the Municipal Corporation for the project and various other factors. 7 Share money, application and entrance fee of the organisation Charges for making application for allotment, share money for future society of residents, etc. 8 formation and registration Formation and registration of the organization and legal charges in connection therewith Charges in respect of formation of future society of residents and associated legal cost. 9 Infrastructure charges Additional charges for development of common area infrastructure. 10 Legal fees Charges for legal cost of the transaction of sale of residential apartments, 4. The order of Advance Ruling Authority: - 4.1 The Appellant had filed an application before the Advance Ruling Authority (AAR) to seek the answers for following two questions in respect of other charges recovered from the customer. (a) Whether the Other Charges received by the company will be treated as consideration for construction servi....
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....11/2021. Thus the appeal is filed late by 36 days. Section 100 provides for condonation of delay up to further 30 days. The appeal has been filed after the stipulated 30 days. So it is liable to be rejected on the ground of barred by limitation. However, the appellant has found support in the Supreme Court order in SMW(C) No.3 of 2020 dt.23.9.2021. The relevant part of the Supreme Court order is reproduced below:- I. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.3.2020 till 2.10.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.3.2021, if any, shall become available with effect from 03.10.2021. 5.2 Thus, the period from 27.8.2021 to 3.10.2021 will stand excluded from the period of limitation. As a result, appeal application filed on 02/11/2021 is treated as filed in time and it is admitted for disposal. 6. The Grounds of Appeal: - 6.1 The impugned order is erroneous and bad in law and has not properly appreciated the factual and legal position. 6.2 The AAR has overlooked the submissions made by the Appellant and has mechanically ruled that services supplied in respe....
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....particular area of business provide similar bundle of services. For example, bundle of catering on board and transport by air is a bundle offered by a majority of airlines. c) The nature of the various services in a bundle of services will also help in determining whether the services are bundled in the ordinary course of business. If the nature of services is such that one of the services combined with such service are in the nature of incidental or ancillary services which help in better enjoyment of a main service. For example, service of stay in a hotel is often combined with a service or laundering of 3-4 items of clothing free of cost per day. Such service is ancillary service to the provision of hotel accommodation and the resultant package would be treated as services naturally bundled in the ordinary course of business. d) Other illustrative indicators, not determinative but indicative of bundling services in ordinary course of business are - - There is a single price or the customer pays the same amount, no matter how much of the package they actually receive or use. - The elements are normally advertised as a package - The dif....
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....the consumer or the services receiver is an important factor in determining whether the services provided are bundled or not. In the construction of residential apartment sector, services in relation to water supply connection charges, electricity meter installation and security deposit for meter, development charges paid to Government authority/local authority, legal fees for transaction of sale of residential apartments can reasonably be expected to be supplied by the builder/ developer/ promoter of a residential project. They are inextricably linked to a residential apartment or dwelling. Without these aspects, the property may not be used. However certain other charges like advance maintenance, club house maintenance, infrastructure charges, share money application and entrance fee of the organization are not expected by every customer. These are not inextricably linked to the construction services in respect of residential projects. 9.3 In the said education note on which the appellant has relied heavily, other illustrative indicators which are indicative of bundling of services in ordinary course of business are provided (cited supra). The analysis of indicative indicators....
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....vor of the Promoter as herein provided. 9.7 Clause 33 (d) states that Promoter shall have absolute and exclusive right and authority to use, utilize and consume present and future FSI and/or TDR which will be made available to them, by the concerned local authorities and the Allottee shall not have or claim any rights and/or claim any rights and/or benefits of whatsoever nature in respect thereof. These two clauses bring out the intention of the parties that customer will not have any claim other than the Apartment agreed to be taken by him/her. Even the benefits arising out of building will be available to promoter/Appellant only. 9.8 There is another clause that grants Promoter the right to use some of the common areas and external facilities to adjoining plot or any other plot in the vicinity of the said property (clause 33 (g)). All these clauses bring out the real nature of the services provided other than construction services. The property in such services (in terms of use, ownerships, etc.) isn't fully transferred to the customers. Hence it is logical and legal to treat such services as not having any inextricable link to the construction services and need to be t....
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....in relation to the directions in which a flat is constructed; the floor on which it is located; the views from the unit; accessibility to other facilities provided in the complex etc. As stated earlier, service tax is a tax on value addition and charges for preferential location in one sense embody the value of the satisfaction derived by a customer from certain additional attributes of the property developed. Such charges cannot be traced directly to the value of any goods or value of land but are as a result of the development of the complex as a whole and the position of a particular unit in the context of the complex. Thus, it is an attempt on part of the appellant to subsume various other charges collected on the guise of Construction Services provided by him. The other charges collected by the appellant is clearly distinguishable from the main services provided. 10. Hence, in view of the above facts and discussion, it is clear that charges in respect of some services are inextricably linked while other services are independently provided to the customer. The dominant intention test and principles for determination of naturally bundled services point out the independent nat....