TaxTMI 
TaxTMI 
2024 (4) TMI 409
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....ide, P.S. Maheshtala, Kolkata - 700140 against the Ruling passed by the West Bengal Advance Ruling Authority vide Order No. 22/WBAAR/2023-24 dated 29.11.2023. 1. This Appeal has been filed by M/s Prinsep Association of Apartment Owners having GSTIN: 19AAKAP4502F1ZL at 1, New Bata Road, Calcutta Riverside, P.S. Maheshtala, Kolkata - 700140 against the Ruling passed by the West Bengal Advance Ruling Authority vide Order No. 22/WBAAR/2023-24 dated 29.11.2023 (hereinafter referred to as the 'WBAAR'). 2. The matter was originally fixed for hearing on 18.01.2024 which was adjourned upon prayer from the appellant and has been finally heard on 20.03.2024. 3. The Appellant sought an advance ruling under section 97 of the West Bengal Goods a....
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....ing fund which serves as a backup fund for supply of specific services. A member contributes to the sinking fund with an agreed condition that the RWA will provide some specific services in future, as and when required out of the said fund. Thus, the amount collected by the appellant from its members for setting up a sinking fund is an advance payment towards future supply of services and such payment comes under the definition of "consideration‟ under clause (31) of section 2 of the GST Act. The appellant is, therefore, liable to pay tax on such supply in terms of sub-section (2) of section 13 of the GST Act. Regarding the third issue, the WBAAR observed that the appellant has collected the electricity charges consumed for common ....
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....tilized since the same has been collected to cater the future needs/contingencies. Relying upon the proviso to clause (31) of section 2 of the GST Act relating to the definition of 'consideration', the appellant has argued that in the instant case the corpus / sinking fund is the amount collected towards the future supply of Service if any which is not ascertainable at the time of collection of the fund. Thus, the fund so collected will be applied as a consideration towards supply of services only at the time of actual supply of services. In view thereof, the amounts collected towards Corpus/Sinking Fund shall not be considered as advance for the purpose of levying GST rather the amount collected shall be leviable to GST when the same is ap....
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....is in the name of the appellant. The appellant involved in providing the service of upkeep and maintenance of common utilities of the apartments and for this the electricity consumed by them becomes an input. Though the electricity bill charges is distributed among its members, it is not the consideration for the supply of electricity due to the members but the value is a part of the consideration for the supply of a bundle of services to its members and hence is liable to tax at appropriate rate. 7. All the parties were duly heard and their submissions were carefully considered. 8. In the instant case, the first issue of applicability of GST on contributions towards the corpus fund made by the members of the Residents' Welfare Associ....
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....goods or services or both includes- (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; [emphasis added] 10. Now, as per the 'ICAI Guidance Note on Terms Used in Financial Statements' [GN(A) 5 issued 1983], published by The Institute of Chartered Accountants of India, a 'Sinking Fund' is a fund created for the repayment of a liability or for the replacement of an asset. Again, in common business parlance, a 'Corpus Fund' refers to a pool of money set aside for a specific pur....
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....d be taxable and the appellant will be liable to pay tax at the time of receipt of such amount in accordance with the provisions of sub-section (2) to section 13 of the GST Act. 12. Regarding the second issue of applicability of tax on electricity charges received by the RWA, attention is drawn towards the Circular No. 206/18/2023-GST dated 31.10.2023 issued by the TRU, Department of Revenue, Ministry of Finance, Government of India, where it has been clarified that: i) whenever electricity is being supplied bundled with renting of immovable property and/or maintenance of premises, as the case may be, it forms a part of composite supply and shall be taxed accordingly. The principal supply is renting of immovable property and/or ....