TaxTMI 
TaxTMI 
2025 (10) TMI 1020
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....outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression "GST Act" would mean the CGST Act and the WBGST Act both. 1.2 The applicant is engaged in a construction activity and a multi storied apartment is being constructed by them. 1.3 The applicant has made this application under sub section (1) of section 97 of the GST Act and the rules made there under seeking an advance ruling in respect of following questions: Classification of construction services being rendered to customers on account of construction of proposed B+G+31 Storey Service Apartment Building at 27, Matheshwartola Road, Kolkata - 700 046 in terms with Notification No. 03/2019-Central Tax (Rate) dated 2....
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....shall be used for setting up the Hotel Cum Convention Centre and other commercial venture/ enterprise excluding residential units and for no other purpose. 2.4 By a Deed of Gift dated 18-07-2014, Ms PS Group Realty Limited & Others [here-in-after referred to as 'Land Owners'] gifted land measuring 12.71 cottah more or less corresponding to 21 decimal on a portion of the said entire complex to the KMC for construction of an access road. 2.5 Now, a Development Agreement with Related Power of Attorney has been executed on 19th June, 2024 between the Land Owners and Ms. SRIPSK Developers LLP [here-in-after referred to as 'Developer' or 'Applicant'] granting the development rights to the Developer for construction of three building blocks, wherein the PHASE-1 will comprise the Service Apartment & the Multi-Level Car Parking and PHASE-2 will comprise the Hotel and both together shall constitute the "Complex" and thereafter market, promote and sell/transfer and otherwise deal with the Service Apartment Units by executing necessary Definitive Agreements. 2.6 In terms with the Development Agreement, necessary sanction was obtained by the Applicant from Kolkata Municipal Corporation....
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....uction of residential complexes vis-à-vis commercial complexes along with associated conditions thereto, in summarised form, for kind perusal - Heading Description of Service Rate of GST (After abatement) Condition 9954 Construction of residential apartments which commences on or after 1st April, 2019 5% (i) No ITC is available - Tax has to be paid through Electronic Cash Ledger; and (ii) 80% of purchases to be made from Registered Persons. 9954 Construction of commercial apartments which commences on or after 1st April, 2019 12% - 2.10 Sl. No. 4 (xxix) and 4 (xxx) of Notification No. 11/2017-Central Tax (Rate), dated 28th June, 2017 read with Notification No. 03/2019-Central Tax (Rate) dated 29th March, 2019 defines "Residential apartment" and "Commercial apartment" respectively, which is elucidated here-in-below for ease of reference - 4(xxix) "Residential apartment" shall mean an apartment intended for residential use as declared to the Real Estate Regulatory Authority or to competent authority; 4(xxx) "Commercial apartment" shall mean an apartment other than a residential apartment. 2.11 Kindly note that in t....
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....19 issued under CGST Act, 2017 and Rules issued thereunder, to avoid unnecessary dispute arising in the future. 2.15 At the outset, please note that while interpreting a taxing statute, the principle and the object of the Act has to be kept in mind and it has to be seen in the light of the scheme of the Act and the context thereof. If the words of the statute are clear, plain, unambiguous, the courts are bound to give effect to that meaning. To find out the exact connotation of a word in a statute, the context in which it is used is to be looked into. The context would quite often provide the key to the meaning of the word and the sense it should carry. It's settling would give colour to it and provide clue to the intention of the legislature in using it. However, all such interpretation is to be done only in case of ambiguity. 2.16 Further, the captioned advance ruling as to whether the captioned project being Palladina, sanctioned as 'service apartments' by Kolkata Municipal Corporation and 'Residential Project' by WBRERA Authorities would fall under Residential Project or Commercial Project in terms with Notification No. 11/2017-Central Tax (Rate), dated 28th June, 2017 re....
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.... 2.19 In the instant case, the captioned project being Palladina, has been categorised as 'Service Apartments' being in the nature of Commercial Project by Kolkata Municipal Corporation, being one of the competent Authority, and the same project being Palladina, has been categorised as 'Residential Projects' by WBRERA, another competent Authority. 2.20 We are of the view that the RERA Authorities have classified the captioned project as 'Residential Project', since, people would be residing in the captioned project and that the unit would not be used as office or shops, which is generally envisaged as 'Commercial Project' by RERA Authorities. However, with conflict in determination of classification of project between competent authorities, we are of the view that one should see the nature of the project and the conditions &/or restriction contained thereto. 2.21 Please note that it is a settled law that while interpreting a taxing statute, the principle and the object of the Act has to be kept in mind. In the instant case, the service apartments, unlike residential apartments, can be let out for short term as well as long term and thus these apartments are genera....
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....ction of three building blocks. The Phase 1 will comprise of Service Apartments and Multi-level Car Parking and Phase 2 will comprise Hotel. All the three buildings will constitute the entire 'Complex'. Accordingly the applicant obtained sanction from KMC for proposed 'B+G+31 storey Service Apartment Building', 'B+G+10 storey Assembly Building (Hotel)' and 'B+G+2 storey Multi-level Car Parking'. The sanction was given by KMC vide sanction plan bearing no. BP 2024070124 dated 20.12.2024 which is valid till 19.12.2029. The project containing service apartments is named as 'Palladina' for the purpose of identification and marketing. The West Bengal Real Estate Regulatory Authority (in short WBRERA) has issued Registration Certificate bearing no. WBRERA/P/KOL/2025/002336 and the same has been granted as 'Residential Project'. Under this fact and circumstance the applicant has raised the question as under: 'Whether the Service Apartment being constructed would fall under construction services of multi-storey residential buildings or construction services of commercial buildings?' 4.3 The applicant believes and states that the perception of service apartment is diffe....
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....amilies or individuals needing more room to work or relax. Cost-Effectiveness for Longer Stays: While the initial cost might be higher than a regular rental, serviced apartments, they can be more economical for longer stays due to the included services and amenities. Suitable for Various needs: They are popular among business travelers, expatriates, tourists, and families seeking a comfortable and convenient accommodation option. 4.6 However, conceptually a service apartment is different from both hotel and residential apartment per se. It is different from a residential apartment so far as the tenure of the stay is concerned. Usually residential apartments are associated with longer period of stay. Residential apartments are, in most of the cases, unfurnished or semi-furnished. They do not offer hotel-like facilities. Service apartments share some similarities with hotels, such as the provision of services. But they differ in terms of space, amenities, and the overall living experience. Service apartments offer more space, privacy, and a more home-like environment, making them ideal for extended stays. So from a common parlance service ....
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....oncept. As per section 2(zn) Real Estate Project means the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, or the development of land into plots or apartments, as the case may be, for the purpose of selling all or some of the said apartments or plots or building, as the case may be, and includes the common areas, the development works, all improvements and structures thereon, and all easement, rights and appurtenances belonging thereto. On the other hand, according to Clause 4(xxx) of Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 read with Notification No. 03/2019 - Central Tax (Rate) dated 29.03.2019, 'Residential Real Estate Project' (RREP) shall mean a REP in which the carpet area of the commercial apartments is not more than 15 per cent. of the total carpet area of all the apartments in the REP. Competent Authority: According to Section 2(p) of the Real Estate (Regulation and Development) Act, 2016, 'Competent Authority' means the local authority or any authority created or established under any law for the time being in force by the appropriate Government which exe....
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....d under any law for the time being in force by the appropriate Government which exercises authority over land under its jurisdiction, and has powers to give permission for development of such immovable property. The Kolkata Municipal Corporation is a local authority as defined in the RERA Act. The history of Kolkata Municipal Corporation as local authority can be traced back as early as September 1726. Then after a series of evolutions and enactments the current structure and functions of the corporation found its consolidation and modern form in the year 1980 through the Calcutta Municipal Corporation Act, 1980. The act became operative in the year 1984 when the West Bengal Legislature passed the Calcutta Municipal Corporation Act, 1984 (West Bengal Act XIII of 1984). The Calcutta Municipal Corporation Act, 1980 as amended has clearly stated the powers and functions of the Corporation in Section 28 and 29 of the act. For the purpose of better understanding the relevant portions of the sections are reproduced as under: '28. General powers of the Corporation - Subject to the provisions of this Act and the rules and the regulations made thereunder, the municipal govern....
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....pment fee and containing such information as may be prescribed. From all the above provisions of the Calcutta Municipal Corporation Act, 1980 as amended, it is clear that KMC fits into the definition of 'competent authority' as per Section 2(p) of the Real Estate (Regulation and Development) Act, 2016 so far as the exercise of authority over land under its jurisdiction and the powers to give permission for development of such immovable property is concerned. In addition to WBRERA, the KMC is also a 'competent authority' to sanction the project called 'Palladina' which the KMC has accepted as 'service apartment building' in the sanctioned plan, not as 'residential apartment building'. As per Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 read with Notification No. 03/2019 - Central Tax (Rate) dated 29.03.2019, the use of a building either as residential or as commercial may be declared to the RERA or to the competent authority. Here the KMC is a competent authority so far as the applicant's project is concerned. 4.10 So far as the Real Estate (Regulation and Development) Act, 2016 is concerned, we find the definition of apartment. But the act does nowhere....