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2018 (9) TMI 1644 - AAR - GSTSupply of goods/services - rate of GST - food, soft drinks, and snacks sold in the Snack Bar & Food Court - N/N. 46/2017- Central Tax (Rate) - Input tax credit - credit on GST paid on Movie Distributor revenue share bill, Projector Rental Bill, Advertising Bill, Security Agency Bill, and House Keeping Bill - Credit on GST paid on goods purchased for the purpose of maintenance such as Vitrified Tiles, Marble, Granite ACP Sheets, Steel Plates, TMT TOR, Bricks, Cement, Paint, Chemicals, Sanitary items like wash basin, urinal pots, and toilet accessories - Credit on GST paid on Works Contract service received from registered & unregistered Contractor for maintenance contract of building. Whether GST @5% can be charged on food, soft drinks, and snacks sold in the Snack Bar & Food Court in terms of Notification no.46/2017? - Held that - The Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 further amended by Notification No.46/2017-Central Tax (Rate) vide entry at Serial Number 7 and corresponding notifications issued under MPGST ACT ,2017, squarely covers the services provided by the Applicant - applicant are not providing any accommodation facility for lodging and boarding and they are also not availing ITC of tax paid on goods & services used/utilized for providing services from the said Snack Bar - On considering the common parlance meaning of Outdoor Catering and its definition for Service Tax, it is concluded that the supply of food, soft drinks and snacks sold in the Food Court or Snack Bar of the Applicant cannot by any stretch of imagination, be treated as a part of outdoor catering. In view of the facts and circumstances, we are of the view that the services provided by the Applicant in Snack Bar would be classifiable under SAC 9963 and chargeable to GST @ 5% (CGST @2.5% SGST @2.5%), provided they fulfill the conditions laid down under Notification 46/2017-Central Tax (Rate) and corresponding notifications issued under MPGST ACT, 2017. Whether ITC of GST paid on Movie Distributor revenue share bill, Projector Rental Bill, Advertising Bill, Security Agency Bill, and House Keeping Bill can be claimed in full? - Held that - The Applicant are running a business of operating a Mall with Multiplex and the services mentioned in this particular question definitely classify as input services for providing the declared services by the Applicant. Thus the said input services are attributable towards providing declared output services by the Applicant for furtherance of their business in terms of Section 16 of the GST Act, 2017 - ITC on such services shall be admissible to the Applicant subject to condition that in case any part of such input services are utilized for providing exempted outward supplies, the apportioned ITC to the extent utilized in providing exempted supplies shall be subject to reversal in terms of Section 17(1) of the GST Act, 2017 Whether ITC on GST paid on goods purchased for the purpose of maintenance such as Vitrified Tiles, Marble, Granite ACP Sheets, Steel Plates, TMT TOR, Bricks, Cement, Paint, Chemicals, Sanitary items like wash basin, urinal pots, and toilet accessories can be claimed in full? - Held that - Mere statement that expenditure is not capitalized cannot come to the rescue of Applicant. Be that as it may, the eligibility of ITC does not depend on the treatment given to the expenditure. If the expenditure is revenue in nature but subsequently capitalized in the books of account it would not make Applicant eligible to ITC on such goods - ITC on such goods used for maintenance/repair/renovation of Mall building, an immovable property, shall not be available to the Applicant. Whether ITC of GST paid on Works Contract service received from registered & unregistered Contractor for maintenance contract of building can be claimed in full? - Held that - As far as availability of ITC on Works Contract Services is concerned the law is very categorical and unambiguous. ITC on works contract services are allowable only in case when such works contract service is used as an input service for providing further output service of Works Contract - Works Contract Service which the Applicant intends to engage is for the civil work etc. for repair/renovation/maintenance of Mall building. Such service is fully consumed at the end of Applicant and it is not an input service for further provision of output service as Works Contract - ITC in respect of Works Contract Service utilised by the Applicant for repair/renovation/maintenance of Mall building shall not be available to them. Ruling - The items supplied in Snack Bar and Food Court shall be chargeable to GST in terms of Notification No.11/2017-Central Tax (Rate) as amended by Notification No.46/2017-Central Tax (Rate) and corresponding notification under MPGST ACT,2017 at prevailing rate of 5%(2.5% SGST and 2.5% CGST), subject to conditions laid down at Serial Number 7 of the parent Notification classifiable under SAC 9963. Applicant shall be entitled to ITC of tax paid on Movie Distributor Revenue Sharing Bill, Projector Rental Bill and Advertising Bill in full; further in respect of Security Agency Bill and Housekeeping Bill, the ITC shall be restricted to the apportioned part which is utilised in providing taxable output services. Any ITC attributable to exempted output services shall be subject to reversal in terms of Section 17(1) of the GST Act 2017. ITC of GST paid on goods purchased for the purpose of maintenance of Mall such as Vitrified Tiles, Marble, Granite, ACP Sheets, Steel Plates, TMT Tor (Saria), Bricks, Cement, Paint, Chemicals, Sanitary Items like wash basin, urinal pots and toilet accessories shall not be admissible to the Applicant in terms of clause (c) of Section 17(5) of the GST Act 2017. ITC of GST paid on Works Contract Service received by the Applicant for maintenance contract of building shall not be available to them in terms of clause (d) of Section 17(5) of the GST Act 2017.
Issues Involved:
1. GST rate on food, soft drinks, and snacks sold in the Snack Bar & Food Court. 2. ITC of GST paid on Movie Distributor revenue share bill, Projector Rental Bill, Advertising Bill, Security Agency Bill, and Housekeeping Bill. 3. ITC on GST paid on goods purchased for maintenance such as Vitrified Tiles, Marble, Granite, ACP Sheets, Steel Plates, TMT TOR, Bricks, Cement, Paint, Chemicals, Sanitary items. 4. ITC of GST paid on Works Contract service received from registered & unregistered contractors for maintenance contract of building. Detailed Analysis: Issue 1: GST Rate on Food, Soft Drinks, and Snacks Sold in the Snack Bar & Food Court The applicant sought clarification on whether GST at 5% can be charged on food, soft drinks, and snacks sold in the Snack Bar & Food Court under Notification No. 46/2017. The Authority for Advance Ruling (AAR) found that the services provided by the applicant fall under the category defined in Notification No. 11/2017-Central Tax (Rate) as amended by Notification No. 46/2017-Central Tax (Rate). The relevant entry specifies that the supply of food and drinks by a restaurant, eating joint, or canteen, not providing lodging services, is chargeable to GST at 5% (2.5% CGST + 2.5% SGST), provided no input tax credit (ITC) is claimed on goods and services used in supplying the service. The AAR concluded that the applicant’s Snack Bar services are classifiable under SAC 9963 and chargeable to GST at 5%, subject to the conditions laid down in the notification. Issue 2: ITC on GST Paid on Various Bills The applicant sought to claim ITC on GST paid on Movie Distributor revenue share bill, Projector Rental Bill, Advertising Bill, Security Agency Bill, and Housekeeping Bill. The AAR held that these services are input services for the applicant's business operations and are attributable to providing declared output services. Therefore, ITC on these services is admissible under Section 16 of the GST Act, 2017. However, for services like Security and Housekeeping, which are also used for exempted supplies (e.g., Snack Bar), ITC must be apportioned, and the portion attributable to exempted supplies must be reversed as per Section 17(1) of the GST Act, 2017. Issue 3: ITC on GST Paid on Goods for Maintenance The applicant sought to claim ITC on GST paid on goods purchased for maintenance, such as Vitrified Tiles, Marble, Granite, ACP Sheets, Steel Plates, TMT TOR, Bricks, Cement, Paint, Chemicals, and Sanitary items. The AAR referred to Section 17(5)(d) of the GST Act, 2017, which prohibits ITC on goods or services used for the construction of an immovable property, including maintenance and renovation. The AAR concluded that since these goods are used for maintaining the Mall building, an immovable property, ITC on such goods is not admissible. Issue 4: ITC on GST Paid on Works Contract Services The applicant sought to claim ITC on GST paid on Works Contract services received from contractors for building maintenance. The AAR referred to Section 17(5)(c) of the GST Act, 2017, which disallows ITC on works contract services when supplied for the construction of an immovable property, except where it is an input service for further supply of works contract service. The AAR concluded that since the applicant uses these services for maintaining the Mall building and not for providing further works contract services, ITC on such services is not admissible. Ruling: 1. GST Rate on Food, Soft Drinks, and Snacks: The items supplied in the Snack Bar and Food Court are chargeable to GST at 5% (2.5% CGST + 2.5% SGST) under Notification No. 11/2017-Central Tax (Rate) as amended by Notification No. 46/2017-Central Tax (Rate), subject to conditions laid down at Serial Number 7 of the parent Notification classifiable under SAC 9963. 2. ITC on Various Bills: ITC on Movie Distributor Revenue Sharing Bill, Projector Rental Bill, and Advertising Bill is fully admissible. For Security Agency Bill and Housekeeping Bill, ITC is restricted to the portion used for taxable output services, and any ITC attributable to exempted output services must be reversed as per Section 17(1) of the GST Act, 2017. 3. ITC on Goods for Maintenance: ITC on GST paid on goods purchased for maintenance, such as Vitrified Tiles, Marble, Granite, ACP Sheets, Steel Plates, TMT TOR, Bricks, Cement, Paint, Chemicals, and Sanitary items, is not admissible under Section 17(5)(d) of the GST Act, 2017. 4. ITC on Works Contract Services: ITC on GST paid on Works Contract services received for building maintenance is not admissible under Section 17(5)(c) of the GST Act, 2017.
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