1. Date of issuance of completion certificate is the date of project completion :

Facts : The Applicant company is engaged in development of real estate projects. The company is having a project at comprising of 77 individual saleable units. The said project is residential-cum-commercial project. Out of total of 77 units, the company has booked 33 units in advance and received consideration in advance in respect of those 33 units when the project was under construction. The company has duly collected and paid applicable service tax or GST on those 33 units. The project has been completed fully in all respect and the company has also applied for completion certificate before the competent authority. However the said completion certificate has still not been received. Out of those 33 units sold, the company has provided the possession to 4-5 buyers. Thus First Occupancy has been provided by the Company in the project premises. Now the company desires to book rest of the 44 units wherein it has not received any consideration in advance before the first occupancy. That Structural Engineer has also certified the fact that work has been completed in the applicant’s project and issued completion Certificate. The Applicant sought to know whether the sale / booking of units in a project after its first occupation and receipt of advance against that booking is classifiable under Para 5 of Schedule-III to the CGST Act, 2017 as sale of building and thus neither regarded as Supply of goods nor supply of services? Thus whether the same is outside the purview of Goods and Services Tax? Whether the booking of units in a project and consequently receipt of advance against that booking after first occupation of the project, where the project has been completed and promoter has applied for issuance of completion certificate, which is pending before local authority; is outside the purview of Goods and Services Tax?

Observations & Findings : As per Schedule-II of CGST Act, 2017 provides that, the following shall be treated as supply of services, namely:- “Construction of a complex, building, civil structure or a part thereof, including a or building intended for sale to a buyer, wholly or partly except where the entire consideration has been received after of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier”.

Ruling : The date of issuance of completion certificate by the competent jurisdictional authority in the instant case shall be considered as the date of completion of the property and if the entire amount of consideration has been received after such date of completion, then that would not be treated as a taxable service. If any part of the consideration is received before such date, then the transaction would be treated as a supply of service as per clause 5 of Schedule II to the GST Act, attracting the levy of GST. The first occupation as claimed by the applicant in the instant case, without having the mandatory completion certificate by the jurisdictional authorities is found to be devoid of any merit.

[2020 (3) TMI 240 – AAR, CHHATTISGARH – AMAN AGRAWAL (Bilaspur Infrastructure Pvt. Ltd]

2. Supply of health care service (Physiotherapy)

Facts : The Applicant, stated to be providing a form of treatment called “Physiotherapy” to cure osteoarthritis and disorders of similar nature, seeks a ruling on whether the above service is exempted under serial no 74 of the Notification No 12/2017 Central Tax (Rate) dated 28/06/2017, as amended. It also wants to know whether it needs to stay registered under the GST Act.

Observations & Findings : Entry No. 74 (a) of the Exemption Notification exempts inter alia health care services by a clinical establishment from payment of GST. Para No. 2 (zg) of the said notification defines health care services. It means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India and includes services by way of transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of the body affected due to congenital defects, developmental abnormalities, injury or trauma. ‘Clinical establishment’ within the meaning under Para No. 2(s) of the Exemption Notification, is a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India, or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases. The term ‘recognised system of medicine’ is not defined in the GST Act or notifications issued thereunder.

Ruling : The Authority did not accept the Applicant’s claim that it is a clinical establishment offering treatment in the recognised ayurvedic system of medicine. Its supplies are not, therefore, health care service by a clinical establishment, as defined under Para No. 2(s) of the Exemption Notification. Applicant’s supply is, therefore, not exempt under Entry No. 74 of the Exemption Notification. It needs to remain registered, as its liability to pay GST does not cease.

[2020 (3) TMI 896 – AAR, West Bengal – Optm Health Care P Ltd.]

3. Input Tax Credit on Vehicles :

Facts : Applicant intends to lease out vehicles like trucks, tankers, etc. without operator to goods transport agencies. It wants to know, Whether supply of services by way of leasing of goods transport vehicles without operators to goods transport agencies would be exempt under Sl. No. 22(b) of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017. Whether the credit of input tax paid on purchasing of motor vehicles is admissible or not.

Observations & Findings : Rental service of transport vehicles with operator is taxable under Sl. No. 10 of Notification No. 11/2017 – CT (Rate) dated 28-06-2017 . But it does not apply to the Applicant’s case, as the Applicant intends to lease out the vehicles without operator.

Section 17(5)(a) of the GST Act does not allow input tax credit on inward supply of motor vehicles of a specific category (those meant for transportation of persons having seating capacity not exceeding thirteen persons). The restriction, therefore, does not apply to the goods transport vehicles. Sl. No. 17(iii) of the Rate Notification does not prohibit claiming input tax credit on the goods given on lease.

Ruling : The Applicant’s service of leasing goods transport vehicles is classifiable under SAC 997311 and taxable under Sl. No. 17(iii) of Notification No. 11/2017 – CT (Rate) dated 28-06-2017. The Applicant can claim input tax credit in accordance with law on the goods transport vehicles so leased out.

[[2020] 113 taxmann.com 424 (AAR-WEST BENGAL) – Ishan Resins & Paints Ltd.]

4. Composite Supply :

Facts : The Applicant is engaged in the activity of providing technological and system solutions, including electrification, industrial automation, motion and robotics, data management and production control systems. Rail Vikas Nigam Ltd., has awarded it the contract for ‘extension of SCADA for Noapara – Dakshineswar Metro Corridor’. The Applicant seeks a ruling on whether Entry 3(v) of Notification No. 11/2017 – Central Tax (Rate) dated 28/06/2017, is applicable for its supply to RVNL by way of erection, commissioning, installation, completion etc. of SCADA System.

Observations & Findings : According to Serial No. 3 (v) (a) of the Rate Notification, the composite supply of works contract, as defined under section 2(119) of the GST Act, supplied by way of construction, erection, commissioning, or installation of original works pertaining to railways, including monorail and metro, is taxable at 12% rate.

Ruling : The Applicant is making a composite supply of works contract taxable under Entry No. 3 (v) (a) of Notification No. 11/2017 – Central Tax (Rate) dated 28/06/2017.

[2020 (3) TMI 895 – AAR, West Bengal – ABB INDIA LTD.]

5. Crushing of Food Grains :

Facts : The Applicant intends to supply to the State Government the service of crushing food grains supplied by the Government, whole, unpolished food grain for processing. The Applicant will return the grain after crushing. The processed food grain will be used for distribution through the PDS. The Applicant seeks a ruling whether the above activity is exempt under SI No. 3 or 3A of Notification No 12/2017 CT (Rate) dated 28/06/2017.

Observations & Findings : In its Circular No. 51/25/2018-GST dated 31/07/2018 the Central Government clarifies that the service tax exemption under Sl No. 25(a) of Notification No. 25/2012 dated 20/06/2012 (hereinafter the ST Notification) has been substantially, although not in the same form, continued under GST vide SI No. 3 and 3A of the Exemption Notification. The activity is in relation to any such function, the supply to the governments or governmental authorities/entities or local authorities is exempt, provided it is either a pure service or a composite supply, where supply of goods does not constitute more than 25% of the value.

Ruling : The Applicant’s agreement with the State Government binds both the supplier and the recipient in such a way that neither can divert the food grains to any use other than distribution through PDS, the Applicant’s composite supply of crushing the food grains belonging to the State Government and delivery of the crushed grains will be exempt under Sl.No. 3A of Notification No 12/2017 CT (Rate) dated 28/06/2017.

[[2020] 114 taxmann.com 369 (AAR-WEST BENGAL) – Sakshi Jhajharia]

6. Transfer of title in goods :

Facts : The applicant is engaged in the supply of automotive components such as door locks and strikers (in short parts’) for various sectors of the automotive industry. As per the agreement entered into with the foreign supplier manufactures the parts and the same are physically imported into India. However, the moulds developed by the foreign supplier are retained with the supplier and are not physically imported into India. Thus, there is only a transfer of ownership in the mould from the foreign supplier to Applicant and the foreign supplier retains the physical possession of the moulds. The Applicant raises separate invoices on the Indian buyer i.e., one for the supply of parts and another for transfer of ownership of the moulds from the Applicant to the Indian buyer. The applicant sought to know whether GST will be applicable on the transfer of title in moulds from applicant to Indian buyer?

Observations & Findings : In view of the expression Supply as defined under Section 7 of the CGST Act 2017, the transfer of title in goods, constitutes a supply.

Ruling : GST is applicable on the transfer of title in moulds from the applicant to the India buyer.

[[2020] 115 taxmann.com 99 (AAR – TAMILNADU) – Automative Components Technology India (P.) Ltd.

7. Works Contract :

Facts : The applicant has entered into joint development agreement with land owners for development of plots which also includes construction of concrete roads and compound walls, development of garden, construction of drain and water supply system and erection of electric poles and transformer etc. The applicant seek to know whether it is covered in para 5 of Schedule III (Sale of Land) or classified under works contract and how the valuation would be done.

Observations & Findings : Provisions in the agreement state that applicant has no right over the land and consequently the applicant cannot claim to be engaged in the activity of sale of land as envisaged in the provisions of entry at Serial number 5 of said Schedule III. The provisions of this entry will apply only to those persons who are the owners of the land and not to persons who are incidental to the sale of land. Section 15 of the CGST Act, 2017 provides that the value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply where the supplier and the recipient are not related and the price is the sole consideration.

Ruling : The activities performed/to be performed by the applicant cannot be classified under Para 5 of schedule Ill. It amounts to supply of services under works contract and is liable to be taxed under GST Act. Rule 31 applies in the instant case and the value of supply is equal to the amount received/receivable by the applicant

[2020 (3) TMI 442 – AAR, MADHYA PRADESH – Vidit Builders]

8. Input Tax Credit Immovable Property :

Facts : The Applicant, a Co-operative Housing Society registered, provides various services to its Residents for which members are charged Maintenance charges under various Heads like – Service Charges, Electricity Charges, Lift Charges, Insurance, etc. The Applicant Society charges GST on such Maintenance Bills as applicable. It seeks to know whether it entitled to ITC of GST paid on replacement of existing lift/elevator at its own premises to vendor registered under GST Act for manufacture, supply, installation and commissioning of lift/elevator, as lift, after erection and installation is an immovable property because it becomes part of an immovable property that is building.

Observations & Findings : Explanation to Section 17(5) is very clear. ITC is available for “plant and machinery”. Plant and machinery means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes – Land, building or any other civil structures.

Ruling : the Applicant, shall not be entitled to claim Input Tax Credit of GST paid on replacement of existing lift/ elevator at its own premises to the vendor registered under the Goods and Services Tax Act for manufacture, supply, installation and commissioning of lift/ elevator.

[[2020] 114 taxmann.com 233 (AAR – MAHARASHTRA) – Las Palmas Co-operative Housing Society Ltd.]

8. Input Tax Credit on Demo Cars :

Facts : The applicant is an authorized dealer for Maruti Suzuki India Limited for supply of motor vehicles and spares and for servicing as also for some other commercial vehicle manufacturers. The applicant has made purchases of motor vehicles against tax invoice which are reflecting in the books of account as capital goods. The vehicles are used as demo cars for providing trial run to customers to understand the features of the vehicle. This is an essential part of marketing and sales promotion to facilitate supply of cars. The applicant seeks to know whether they are entitled to take ITC on cars used as domo cars.

Observations & Findings : As per section 17 (5) (a) the input tax credit shall not be available on motor vehicles except when they are used for making further supply of such motor vehicles. The further supply of such demo motor vehicle are made after one or two years and constitutes a taxable supply and GST is paid thereon. GST Act does not prescribe the time within which further supply is to be effected. Hence, the impugned tax credit is available.

Ruling : The applicant is entitled to avail Input tax credit charged on inward supply of Motor Vehicle which are used for Demonstration purpose in the course of business of supply of Motor Vehicle as input tax credit on capital goods and whether the same can be utilised for payment of output tax payable under this Act.

[[2020] 113 taxmann.com 365 (AAR – MAHARASHTRA) – Chowgule Industries (P.) Ltd.]

9. Restaurant Service :

Facts : The applicant intends to serve food and beverages for consumption in a restaurant, which is owned and operated by one ‘C’ and is situated in a retail arcade and ‘C’ also operates a hotel under the brand name ‘JW Marriott’ on the same plot as the arcade. The Hotel offers rooms for lodging and boarding which have a declared tariff above Rs.7500 per day. It sought to know that What would be the rate of tax applicable to the applicant providing restaurant services as per facts of the case mentioned.

Observations & Findings : As per Sl. No. 7(iii) of Notification No. 11/2017-CT(Rate), dated 28-6-2017, as amended, supply of food or drinks in a restaurant for consumption within the restaurant premises or away from the restaurant premises, where the restaurant is located in the premises of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes with a tariff of Rs.7,500 and above per unit/room per day or equivalent for any unit/room in the premises, the applicable rate of GST will be 18%.

Ruling : Rate of tax applicable in the subject case is 18% GST (9% each of CGST and SGST).

[[2020] 114 taxmann.com 234 (AAR – MAHARASHTRA) – Kutting Fusion Hospitality LLP]

10. Transactions before 01/07/2017 :

Facts : The Applicant has stated that they had entered into an agreement, dated November 21, 2016 with the contractee for construction of a Building. As per the Agreement the applicant received ‘Mobilization Advance’ from the contractee before the implementation of the GST, i.e., prior to 01/07/2017. They have also stated that, on receipt of ‘Mobilization Advance’ the applicant had paid Service tax. It sought to know that are they liable to pay GST on the amount of Mobilisation Advance adjusted against the invoices raised during the GST regime.

Observations & Findings : Section 142(11)(b) applies to transactions in services on which Service tax was leviable and it over-rides Section 13 of GST law which states that liability to pay tax on services arise at the time of supply as determined by provisions of Section 13.

Ruling : The Mobilisation advance to the extent received prior to the implementation of GST towards supply of Works Contract Service is not to be subjected to GST as per the provisions of Section 142(11)(b) of the GST Act 2017.

[2020 (3) TMI 295 – AAR, Tamil Nadu – Shapoorji Pallonji and Company P Ltd.]