2020 (7) TMI 81 - AAR - GST

Scope of Advance Ruling Application - Input tax credit in relation to jointly owned property - requirement of issuance of separate invoice showing the respective ownership share ratio of the each owner - HELD THAT - Section 95 allows this authority to decide the matter in respect of supply of goods or services or both, undertaken or proposed to be undertaken by the applicant on the matters or questions specified in sub-section (2) of section 97. We find that, in the subject case the maintenance charges are collected by the society for having rendered Club or association services to all the four co-owners including the applicant. Thus, the supply of services, in respect of which the question has been raised, is being undertaken by the society and not by the applicant. Applicant is a recipient of services in the subject transaction. The impugned question raised by applicant is in relation to procedure to be followed by the society in respect of issue of invoices to applicant for the common area maintenance charges and hence the issue is not within the purview of Section 97(2) under the Act. Therefore, the subject application cannot be admitted. Whether there are any provisions under the CGST Act, 2017 by which credit of lumpsum CGST charged to the only one co-owner can be transferred to the other co-owners proportionately? - HELD THAT - The subject application cannot be admitted. Further, it is also seen that the question raised does not fall under any of the provisions of Section 97 (2) of the CGST Act, 2017. The subject application for advance ruling made by the applicant is rejected under the provisions of sub-section 2 of Section 98 of the CGST Act, 2017.

Summary

Issues:
1. Liability of joint property owners for GST on rent income and maintenance charges.
2. Transfer of input tax credit among joint property owners under CGST Act, 2017.

Analysis:
1. Liability of Joint Property Owners for GST:
- The applicant sought an advance ruling regarding the liability of joint property owners for GST on rent income and maintenance charges. The applicant, along with three other co-owners, leased out properties and raised separate tax invoices for their respective shares. However, the society later issued a consolidated tax invoice in the name of one co-owner, charging GST accordingly.
- The applicant argued that separate tax invoices should be raised for each co-owner based on their ownership share ratio to claim input tax credit as per Section 16 of the CGST Act, 2017.
- The jurisdictional officer contended that there is no provision to bifurcate input tax credit among co-owners when a lump sum GST is charged to only one co-owner.
- The Authority observed that the question raised by the applicant was related to the procedure followed by the society in issuing invoices for common area maintenance charges, not directly linked to the applicant's supply of goods or services. Therefore, the application was deemed inadmissible under Section 97(2) of the Act.

2. Transfer of Input Tax Credit among Joint Property Owners:
- The second question raised was whether there are provisions under the CGST Act, 2017 to transfer the credit of lump sum GST charged to one co-owner to others proportionately.
- The Authority reiterated that the application was not maintainable under Section 97(2) of the CGST Act, 2017, as the question did not fall within its purview.
- Consequently, the application for an advance ruling was rejected under Section 98(2) of the CGST Act, 2017, as the questions raised were deemed not admissible for ruling by the Authority.

This detailed analysis of the judgment from the Authority for Advance Ruling, Maharashtra, highlights the issues of liability of joint property owners for GST and the transfer of input tax credit among co-owners under the CGST Act, 2017. The ruling clarified the inadmissibility of the application based on the specific provisions of the Act and the nature of the questions raised by the applicant.