2022 (2) TMI 1102 - AAR - GST

Exemption from GST - providing services of theme parks and intend to construct a building namely 'SUNDHA DARSHAN MUSEUM' near Sunda Mata Temple - applicability of Notification No. 12/2017- Central Tax (Rate)dated 28th June, 2017 in respect of said 'SUNDHA DARSHAN MUSEUM' - whether the said building to which the applicant claiming as 'Sundha Darshan Museum' is museum or otherwise so that applicability of Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017 can be determined? - HELD THAT - The museum means a non-profit organisation that stores objects of both natural and cultural heritage, cares and provides necessary conservation supports required to objects in both display and storage and exhibits objects for the knowledge of common people. The premises claimed by the applicant as 'museum' is founded and developed by a Limited Liability Partnership (LLP) firm namely M/s Vakao Theme parks LLP which is a business entity. The Main Business Activity of Vakao Theme Park LLP is Recreational, cultural and sporting activities . Further, as per discussion held with its authorized representative during personal hearing dated 30.11.2021, it emerges that this firm intend to develop amusement parks near sunda mata temple. The creation of Sundha Darshan Museum is one of the way with a motto to increase people foot- fall in order to run these amusement/theme parks. This building is owned by its partners which shows that it is not a non-profit entity. The primary purpose of the said premises is making profit rather than to serve society or public at large. Being a partnership firm, the applicant has a motto to develop the nearby area of Sundha mata temple for earning profit by developing 'Sunha Darshan Museum'and amusement parks. Mere placing some new idols sculptures in the said 'Sunha Darshan Museum' to exhibit story of sundha mata temple in the name of service to society, does not qualify as 'museum' due to its profit earning motto. The applicant is not eligible to avail benefits of entry at S. No. 79 of the Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017 in respect of 'Services by way of admission to a museum'. The services provided/to be provided by the applicant will be classified under item No. (vi) of column No. 3 of S. No. 34(heading 9996) of the Notification No. 11/2017-CT(R) dated 28.06.2017 under Recreational, Cultural and sporting services other than (i), (ii), (iia), (iii) (iiia), (iv) and (v) above , and the applicant is liable to pay GST @ 18%.

Summary

Issues involved:
1. Determination of liability to pay tax on services provided.
2. Exemption of services under Goods and Service Tax.
3. Applicability of Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017.

Detailed Analysis:
Issue 1: Determination of liability to pay tax on services provided.
The applicant, engaged in providing theme park services, sought an advance ruling on the taxability of services provided by constructing a museum. The applicant claimed that the museum fell under the definition of a museum as per general understanding and should be exempt from GST under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. However, the jurisdictional officer classified the services under SAC 999699, attracting 18% GST. The ruling authority examined the definition of a museum by the International Council of Museum (ICOM) and concluded that the building claimed as a museum was not a non-profit entity but a profit-making venture. As the primary purpose was profit, the services provided were classified under recreational, cultural, and sporting services, attracting 18% GST.

Issue 2: Exemption of services under Goods and Service Tax.
The ruling authority determined that the building claimed as a museum did not meet the criteria of a museum as per the ICOM definition. Therefore, the applicant was not eligible for the exemption under Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017. Instead, the services provided by the applicant were classified under recreational, cultural, and sporting services, attracting 18% GST (9% CGST + 9% SGST).

Issue 3: Applicability of Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017.
The ruling authority analyzed the relevant provisions of the statute, including the service code for museum and preservation services. They also examined the specific entry in Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017, which exempted services by way of admission to a museum. However, based on the definition of a museum provided by ICOM and the profit motive of the applicant's venture, it was concluded that the applicant's services did not qualify for the exemption under the said notification.

In conclusion, the ruling authority held that the building claimed as a museum was not a museum as per the ICOM definition, and the applicant was liable to pay GST at 18% on the services provided.