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2019 (11) TMI 1451 - AAAR - GSTApplicable rate of GST on the services/ activities of the Company - reduced rate of GST - services by way of admission to amusement parks including theme parks water parks joy rides merry-go-rounds go-carting and ballet - GST Notification 01/2018 - whether the gaming zone operated by the Appellant in the mall could be construed as amusement park as being proffered by the Appellant or otherwise? - HELD THAT - It has been established beyond doubt that the gaming zone operated by the Appellant in the closed premises of mall is not the amusement park but the same can more reasonably be envisaged as amusement arcade. Benefit of N/N. 11/2017-C.T. (Rate) dated 28.06.2017 as amended by the Notification No. 1/2018-C.T. (Rate) dated 25.01.2018 - HELD THAT - It is seen that entry (iii) talks about the amusement parks including theme parks water parks joy rides merry-go rounds go-carting and ballet. On a plain reading of this expression of entry (iii) and applying the rule of legal interpretation it may adequately be inferred that the said entry does not talk about the fun or recreation in the nature of the arcade games as is in the present case of the Appellant. Hence it can decisively be concluded that the aforesaid entry (iii) does not cover the activities of the Appellant. On the other side the entry (iiia) of the amended Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 squarely covers the Appellant s activities as the gaming zone operated by the Appellant in the mall s closed premises are nothing but the amusement facilities as per the definition of the amusement facility provided under section 65 (B)(9) of the erstwhile Finance Act 1994. Thus it is clearly revealed that the provision of the fun or recreation by the Appellant by means of amusement rides and gaming devices deployed in the covered area of the mall premises which can reasonably be construed as amusement arcade as has been established above is nothing but the amusement facility. It is perspicuous that the gaming zone operated by the Appellant in the mall would be covered by entry (iiia) of Sr. 34 of the Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 as amended by the Notification No. 1/2018 - C. T. (Rate) dated 25.01.2018 and would accordingly attract GST at rate of 28%.
Issues Involved:
1. Determination of GST rate on services provided by the Company. 2. Classification of the Company’s services as either an "amusement park" or "amusement facility." 3. Interpretation of relevant statutory provisions and notifications. Issue-Wise Detailed Analysis: 1. Determination of GST rate on services provided by the Company: The Company, engaged in providing amusement facility services and running a family entertainment center, sought an Advance Ruling to determine the applicable GST rate on its services following the issuance of GST Notification 01/2018. Initially, the applicable GST rate was 28%, which was later reduced to 18% for amusement parks through Notification 01/2018. The Company contended that its services fell under the category of "amusement park" and thus qualified for the reduced GST rate of 18%. 2. Classification of the Company’s services as either an "amusement park" or "amusement facility": The Company argued that its services should be classified as an "amusement park" based on the definition provided in the erstwhile Bombay Entertainment Duty Act, which includes various types of amusements such as games or rides provided on a permanent basis. The Company highlighted that its services promote social wellness, fun, and learning for children, aligning with the objectives mentioned in the press release following the 25th GST Council meeting. The Authority for Advance Ruling (AAR) and the Appellate Authority examined definitions from various sources, including the Bombay Entertainment Duty Act, dictionaries, and Wikipedia. The AAR distinguished between "amusement parks" and "amusement facilities," noting that amusement parks typically cover large open areas with multiple attractions, while amusement facilities are confined to smaller, enclosed spaces offering singular attractions like gaming machines. 3. Interpretation of relevant statutory provisions and notifications: The AAR relied on the definition of "amusement facility" from the erstwhile Finance Act, 1994, which includes fun or recreation provided by rides, gaming devices, or bowling alleys in amusement parks, amusement arcades, water parks, theme parks, or similar places. The AAR concluded that the Company's gaming zone, situated in a mall, fits the description of an "amusement arcade" rather than an "amusement park." The AAR also referred to the Supreme Court judgment in Commissioner of Customs (Import), Mumbai v/s Dilip Kumar and Company & ORS, emphasizing that exemption notifications should be interpreted strictly, and the burden of proving applicability lies with the assessee. The AAR determined that the Company's services did not meet the criteria for an amusement park due to the enclosed nature of the premises and the lack of auxiliary facilities typically associated with amusement parks. Final Judgment: The Appellate Authority upheld the AAR's ruling, affirming that the gaming zone operated by the Company in the mall premises would attract GST at the rate of 28% (CGST @14% + SGST @14%) under entry (iiia) of Sr.34 of Notification No. 11/2017-C.T. (Rate) dated 28.06.2017, as amended by Notification No. 1/2018-C.T. (Rate) dated 25.01.2018. The Authority concluded that the Company's services are classified as an "amusement facility" rather than an "amusement park," thus not qualifying for the reduced GST rate of 18%.
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