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2021 (6) TMI 520 - AAR - GSTClassification of services - Fee from parks - Market fee-daily - Market fee-weekly - Fees for bays in bus stand (bus stand entrance fee collection) - Bus -stand (others), charges for of TV advt. in bus-stand - Bus -stand (others), locker rent provided in bus- stand - Bus -stand (others), flower shop in bus stand in open space - Bus -stand (others), cycle stand, scooter, auto, four wheeler stand in bus stand and other places - Bus -stand (others), collection of room rent for temporary stay - Slaughter house fees - Rent,Travelers bungalows rest house (municipal lodge) - Fees on pay use toilets - For entry vehicle in the market - N/N. 14/2017C.T.(Rate) dated 28.06.2017(or) Sl.No. 4 of N/N. 12/2017-C.T.(Rate) dated 28.06.2017 - HELD THAT - The applicant is a Municipality as defined in clause (e) of article 243 P of the Constitution and has stated to be covered under the definition of Local Authority as defined under Section 2(69) of the CGST Act 2017. Whether the tax paid by them under Direct charge, when the same is to be paid under Reverse Charge can be condoned as a technical lapse and regularized? - Scope of Advance Ruling application - HELD THAT - Section 97 (2) of the CGST Act / Tamil Nadu GST Act (TNGST) gives the scope of Advance Ruling Authority, i.e., the question on which the Advance Ruling can be sought - The Act limits the Advance Ruling Authority to decide the issues earmarked for it under Section 97(2) and no other issue can be decided by the Advance Ruling Authority. The question at SI.No.4 seeks regularization of the payment made by them considering the same as a technical lapse, which is not in the purview of this authority as per Section 97 (2) - this question is outside the scope of Advance Ruling application. The applicant being a Municipality as defined in clause (e) of article 243 P of the Constitution, is a Local Authority under the GST Act. Therefore, if the services listed here are found to be that in relation to the entries of Eleventh Twelfth Schedule of the Constitution, and the said activities are undertaken by the applicant, a Local authority, when engaged as a Public Authority , then the said activities are to be treated neither as supply of goods nor supply of services effective from 26.07.2018. Alternatively, the applicant has claimed that the services are covered under the exemption at Sl.No. 4 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 as amended - As can be seen, the entry is not applicable in respect of Local Authority effective from 26.07.2018 and stands covered under Notification No. 14/2017-C.T.(Rate) dated 28.06.2017. In the case at hand, the applicant is a Municipality, which is a local authority and is not a Governmental Authority. Therefore, this entry does not have any application to the applicant. Advance Ruling is applicable to the supplies currently being made or proposed to be made as per S.95 of the GST Act. In that count also, the application in hand being filed after 26.07.2018, the date effective which, the words, Local Authority stands omitted, sl.No. 4 of the notification No. 12/2017-C.T.(Rate) dated 28.06.2017 do not have any application and this claim is rejected. Fee from Park - HELD THAT - It is stated that the fee is collected for allowing the public, entry to the park maintained by the applicant. As per entry (1) of the Twelfth Schedule above, Provision of Urban amenities such as Parks is function bestowed with the Municipality under Article 243 W of the Constitution. The applicant being a local authority is to provide such urban amenities as a public authority - The said activity when provided by the applicant, as per Notification No. 14/2017 C.T.(Rate) dated 28.06.2017 as amended with effective from 26.07.2018, is neither a supply of goods nor supply of service and not taxable to GST. Market Fees- Daily Weekly - HELD THAT - It is stated that the applicant collects entrance fee from the farmers/ Merchants on daily basis for allowing them entry into the market. From the submissions, it is seen that the considerations are for the infrastructure of the shop (thatched shop/ thatched shed/ RC shop/ AC Sheet shed) in the market, open space allotted and the entities (vegetable bundle/ fish basket/ hen/ handcart/ coconut/ leaves bundle/ tomato basket) brought to the market - The considerations collected based on the infrastructure extended to the farmers/ merchants and the entities brought for sale are to convenient the public, wherein the applicant acts as a Public authority , in relation to the function Markets Fairs listed in the Eleventh Schedule. The said activity when provided by the applicant, as per Notification No. 14/2017 C.T.(Rate) dated 28.06.2017, is neither a supply of goods nor supply of service and not taxable to GST. Fees for bays in bus-stand - HELD THAT - It is stated that the applicant collects the fees from the bus owners/ Govt. transport department for allowing parking of bus on per day basis and they claim the same is in relation to the public amenity listed at (q) of Twelfth Schedule of the Constitution. Entry (q) states Public amenities including street lighting, parking lots, bus stops and public conveniences - applicant undertakes the activity as a public authority and therefore, the said activity when provided by the applicant, is neither a supply of goods nor supply of service as per Notification No. 14/2017-C.T.(Rate) dated 28.06.2017 as amended effective from 26.07.2018. Bus-stand, others - HELD THAT - This aspect is not required to be considered. Locker rent - HELD THAT - It is stated that the lockers are extended for rent for the public. The consideration is collected per bag/ suitcase/ bundle with material. The applicant has claimed that the activity is in relation to the function stated at (l) of the Twelfth Schedule of the Constitution - Here, the activity is providing Lockers in the Bus-stand which is not in the genre stated in the said entry. Therefore, providing lockers in the Bus-stand is not an activity in relation to the function at (l) of the Twelfth Schedule and hence, Notification No. 14/2017-C.T.(Rate) dated 28.06.2017 as amended is not applicable to this activity. Cycle Stand. Scooter, Auto and Four wheeler stand in Bus-stand - HELD THAT - The applicant provides parking lots which is an activity specified in the said entry. The applicant undertakes the above activity as a public authority and therefore, the said activity when provided by the applicant, is neither a supply of goods nor supply of service as per Notification No. 14/2017C.T.(Rate) dated 28.06.2017 as amended effective from 26.07.2018. Collection of Room Rent for temporary stay - HELD THAT - Providing rooms for temporary stay in the Bus-stand is not an activity in relation to the function at (q) of the Twelfth Schedule and hence, Notification No. 14/2017-C.T.(Rate) dated 28.06.2017 as amended is not applicable to this activity - the service of renting of room for temporary stay is exempted under Sl.No. 14 of the Notification No. 12/2017 -C.T. (Rate) dated 28.06.2017 as amended. Slaughter house fees - HELD THAT - It is stated that the service is allowing the public for the purpose of slaughter of animals. The applicant has stated that the same is in relation to the function at (r) Regulation of slaughter houses and tanneries of the Twelfth Schedule of the Constitution. The applicant undertakes the above activity as a public authority and therefore, the said activity when provided by the applicant, is neither a supply of goods nor supply of service as per Notification No. 14/2017-C.T.(Rate) dated 28.06.2017 as amended effective from 26.07.2018. Rent-Travelers bungalows rest house - Municipal lodge - HELD THAT - The applicant has stated that the activity is allowing public to use single bed room / double bed room on daily basis. They have claimed that the activity is a function listed at (q) of the Twelfth Schedule of the constitution. As, it can be seen, the said entry provides Public amenities including street lighting, parking lots, bus stops and public conveniences . Renting room for temporary stay on daily rent basis is not an activity in relation to the activities stipulated in the entry (q), as it is not in the genre of the inclusive-activities specified in the said entry. Therefore, providing rooms for temporary stay in the Bus-stand is not an activity in relation to the function at (q) of the Twelfth Schedule and hence, Notification No. 14/2017-C.T.(Rate) dated 28.06.2017 as amended is not applicable to this activity - In the case at hand the service is extended by the applicant and the consideration is mentioned as ₹ 40/- per day per single bed and ₹ 60/- per double bed/per day, which is well within the value of supply mentioned to be exempted under this entry. Accordingly, the services of renting room for temporary Stay are exempted under SI.No. 14 of the Notification No. 12/2017-C.T. (Rate) dated 28.06.2017 as amended. Fees on Pay use Toilets - HELD THAT - The applicant undertakes the above activity as a public authority and therefore, the said activity when provided by the applicant, is neither a supply of goods nor supply of service as per Notification No. 14/2017-C.T.(Rate) dated 28.06.2017 as amended effective from 26.07.2018. For entry of vehicle in the market - HELD THAT - Providing for Markets includes provision for entry of vehicles in the market. Therefore, providing for entry of vehicle in the market is an activity in relation to function (xxii) Markets Fairs entrusted to a Panchayat under Article 243 G of the Constitution. The applicant undertakes the above activity as a public authority and therefore, the said activity when provided by the applicant, is neither a supply of goods nor supply of service as per Notification No. 14/2017-C.T.(Rate) dated 28.06.2017. Applicability of the Notification to the supplies of the contractors - HELD THAT - The applicant supplies the Right to collect the fees/right to certain amenities to the contractors and the supply undertaken by the contractors are as per the tender conditions which is an independent supply. The applicability of the Notification to the supplies of the contractors is not answered as per S.95(a) readwith S. 103(1) of the GST Act. Collection of charges for laying of cables alongside roads and collecting road cutting charges as well as annual rent - HELD THAT - Supply of allowing the road cut for laying the OFC and allowing the space alongside the road for the OFC lines are not composite supply as defined under S. 2(30) of the GST Act, 2017 in as much as these two supplies are not made in conjunction with each other in the ordinary course of business, Hence Composite supply cannot be applied for classifying the said service as Renting of Immovable property service . Regularization of the payment made - direct charge of reverse charge - scope of Advance Ruling - HELD THAT - The same is a technical lapse, which is not in the purview of this authority as per Section 97 (2) and therefore, the question is not admitted under Section 98(2) of the Act. Renting of immovable property service rendered by local authority to Pure state Govt. offices - HELD THAT - Pure state Govt. offices (viz) Asst. Director of L F Accounts, Project Officer, ICDS, ICDS Centre Deputy Supt. Of Police and pure Central Govt offices (viz) post offices are fully exempted or not as per entry SI no 8 of the table to Notfn. No 12/2017 dated 28-06-2017. Renting of immovable property service rendered by local authority to Co-operative society - HELD THAT - Co-operative society(viz) Chindhamani Super Market, Jeeva Co-Op Society TNSTC Staff Society, Jeeva Co-Op Society and transport corporation TNSTC are exempted or not as per entry SI no 8 of the table to Notfn. No 12/2017 dated28-06-2017. Renting of immovable property service rendered by local authority to Nationalised Banks - HELD THAT - Nationalised Banks are exempted or not as per St no 8 of the table to Notfn. No 12/2017 dated 28-06-2017.
Issues Involved:
1. Whether the services rendered by the municipality directly are covered under Twelfth Schedule to Article 243W of the Constitution and/or exempted under the specified notifications. 2. Whether the services rendered by the municipality through tender contractors are covered under Twelfth Schedule to Article 243W of the Constitution and/or exempted under the specified notifications. 3. Whether composite supply can be applied for classifying the service of laying cables alongside roads as renting of immovable property service and if reverse charge can be applied. 4. Whether tax collected under direct charge instead of reverse charge can be regularized. 5. Whether renting of immovable property service to various entities is fully exempted under the specified notification. Detailed Analysis: Issue 1: Direct Services by Municipality 1. Fee from Parks: - Entry: (l) of Twelfth Schedule to Article 243W. - Ruling: Not a supply of service as per Notification No. 14/2017-CT(R) dated 28-06-2017 as amended. 2. Market Fee (Daily & Weekly): - Entry: (xxii) of 243G. - Ruling: Not a supply of service as per Notification No. 14/2017-CT(R) dated 28-06-2017. 3. Fees for Bays in Bus Stand: - Entry: (q) of 243W. - Ruling: Not a supply of service as per Notification No. 14/2017-CT(R) dated 28-06-2017 as amended. 4. Bus Stand (Others): - Locker Rent: - Entry: Not specified. - Ruling: Taxable as it does not fall under Notification No. 14/2017 dated 28-06-2017. - Cycle Stand, Scooter, Auto, Four Wheeler Stand: - Entry: (q) of 243W. - Ruling: Not a supply of service as per Notification No. 14/2017-CT(R) dated 28-06-2017 as amended. - Room Rent for Temporary Stay: - Entry: Not specified. - Ruling: Exempted from tax as per SI. No. 14 of Notification 12/2017-CT(R) dated 28.06.2017. 5. Slaughter House Fees: - Entry: (r) of 243W. - Ruling: Not a supply of service as per Notification No. 14/2017-CT(R) dated 28-06-2017 as amended. 6. Rent - Travelers’ Bungalows & Rest House (Municipal Lodge): - Entry: Not specified. - Ruling: Exempted from tax as per SI. No. 14 of Notification 12/2017-CT(R) dated 28.06.2017. 7. Fees on Pay & Use Toilets: - Entry: (q) of 243W. - Ruling: Not a supply of service as per Notification No. 14/2017-CT(R) dated 28-06-2017 as amended. 8. For Entry Vehicle in the Market: - Entry: (l) of 243W and (xxii) of 243G. - Ruling: Not a supply of service as per Notification No. 14/2017-CT(R) dated 28-06-2017. Issue 2: Services Rendered Through Tender Contractors - The applicant supplies the ‘Right to collect the fees/right to certain amenities’ to the contractors, which is an independent supply. The applicability of the Notification to the supplies of the contractors is not answered as per S.95(a) read with S. 103(1) of the GST Act. Issue 3: Composite Supply for Laying Cables - Ruling: Supply of allowing the road cut for laying the OFC and allowing the space alongside the road for the OFC lines are not ‘composite supply’ as defined under S. 2(30) of the GST Act, 2017. Hence, composite supply cannot be applied for classifying the said service as ‘Renting of Immovable Property service’. Issue 4: Regularization of Tax Collected Under Direct Charge - Ruling: The question seeks regularization of the payment made by them considering the same as a technical lapse, which is not in the purview of this authority as per Section 97 (2) and therefore, the question is not admitted under Section 98(2) of the Act. Issue 5: Renting of Immovable Property Service - Ruling: Service of renting of immovable property by the applicant to another Central/State government/Union territory or Local authority alone is exempted from tax as per SI. No. 8 of Notification 12/2017 dated 28.06.2017. The services of renting of immovable property to other than Central/State Government, Union Territory, or Local authority are not exempted under Sl.No. 8 of the table to Notification No. 12/2017-C.T.(Rate) dated 28.06.2017. Conclusion: The judgment provides detailed rulings on the taxability and exemptions of various services provided by the municipality, both directly and through contractors, under the GST regime. It clarifies the applicability of specific notifications and constitutional provisions to these services.
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