9911796707
TMI Blog2018 (9) TMI 1644X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding ₹ 100/-) or @18% (on tickets below ₹ 100/-); ii. Renting of Shops - @18% iii. Common Area Maintenance Charges - @18% iv. Sale of Food Drinks - @5% (Without claiming ITC on food items and beverages purchased) 3.3 Further, the Applicant is claiming ITC of GST paid on following inward supplies of goods services: i. Movie Distributor Share Bill - Movie Distributor is raising a bill against revenue share of sale of movie tickets of every movie; ii. Projector Rental Bills - The Applicant has taken a projector on rent for screening of movies; iii. Advertising Bill - Relating to advertisements of movies published in local Newspapers; iv. Security Agency Housekeeping Bill - Security and Housekeeping services are used for office area, public area and common area of Multiplex. It has been informed by the Applicant that it is claiming full ITC on civil items purchased for maintenance and renovation of the building. And the Applicant is also engaging registered and unregistered contractors for Works Contract Service for the purpose of maintenance and renovation of building. 3.4 The Applicant have put forth their own in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d) Goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course of furtherance of business. Explanation : For the purpose of clause (c) and (d), the expression construction includes re-construction renovation, additions or alterations or repairs, to the extent of capitalization, to the said immovable property; The inward supply of goods and services as mentioned in the questions 2 and 3, is for the purpose of maintenance renovation of building and it is not capitalized in the books of accounts. These expenses are revenue in nature and hence full ITC can be claimed. 4 QUESTIONS RAISED BEFORE THE AUTHORITY: The following questions have been posed before the Authority, with reference to the activity undertaken by the Applicant: 4.1 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; 4.2 Whether ITC of GST paid on Movie Distributor revenue share bill, Projector Rental Bill, Advertising Bill, Security Agency Bill, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, paints, chemicals, sanitary items etc. Can be claimed in full? The Jurisdictional CGST Commissionerate has opined that the Applicant does not appear to be entitled to avail ITC on aforesaid items because it has been specifically mentioned in the conditions for non-admissibility of ITC in clause (c) and Clause (d) of Sub-section (5) of Section 17 of the Act ibid; which reads as under: (5) Notwithstanding anything contained in sub-section (1) of Section 16 and subsection (1) of Section 18, Input tax credit shall not be available in respect of the following, namely: (a) (b) (c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service; (d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. Explanation . For the purposes of clauses (c) and (d), the expression construction includes re-construction, renovation, ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue sharing of net ticket sales which start from 52.5% for the first week, and subsequently 45%, 37.5% and 30% for 2 nd , 3 rd and 4 th week onwards respectively. C. As regards civil maintenance work of Mall it was submitted that owing to high footfall the building requires continuous maintenance and repair for which they engage services of petty contractors and also purchase various items like vitrified tiles, marbles etc. as already detailed in the Application. The work contractor raises bills for the work carried out and on such bills they intend to avail ITC. 7 DISCUSSIONS AND FINDINGS: 7.1 We have carefully considered the submissions made by the applicant in the application, the pleadings on behalf of the Applicant made during the course of personal hearing and the Department's view provided by the Joint Commissioner, CGST Central Excise, Jabalpur. 7.2 We find that the extent application seeks Ruling on four question categorically. We would deal with these questions one by one to arrive at conclusion. 7.3 The first question reads, Whether GST @5% can be charged on food, soft drinks, and snacks sold in the Snack Bar Food Court in term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 7.4 Now coming to the second question posed by the Applicant, which reads, 'Whether ITC of GST paid on Movie Distributor revenue share bill, Projector Rental Bill, Advettising Bill, Security Agency Bill, and House Keeping Bill can be claimed in full? I We find it amply clear from the Application 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 we are convinced that 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. Accordingly, ITC on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g by the said definition it has been argued that ITC of materials used for maintenance can be claimed in full if the cost of maintenance is not capitalized. We find that capitalization of expenditure depends on the nature of expenditure and the period of benefit from such expenditure. However, the Application falls pretty short in elucidating the nature of expenditure i.e. capital or revenue. Thus we are constrained to reach any definitive conclusion on this argument. 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. Thus in view of the specific provisions of law, we are of the opinion that ITC on such goods used for maintenance/repair/renovation of Mall building, an immovable property, shall not be available to the Applicant. 7.6 Now coming to the fourth and ultimate question, the Applicant have desired a ruling on, Whether ITC of GST paid on Works Contract service received from registere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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