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TMI Blog2019 (5) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... r in the ordinary course of business, and the other services of the bundle are ancillary to the supply of the construction service, which describes the essential character of the bundle of services being supplied. The Applicant is providing a composite supply of the bundle of services, construction service being the principal supply. Entire value of the composite supply is, therefore, to be treated, for the purpose of taxation, as the supply of construction service, taxable under Sl No. 3(i) read with Paragraph 2 of the Rate Notification. - Case Number 07 of 2019 Order Number 01/WBAAR/2019-20 - - - Dated:- 2-5-2019 - MR. SYDNEY D SILVA, AND MR. PARTHASARATHI DEY, MEMBER Applicant s representative heard Amit Agarwal, Dy. General Manager Preamble A person within the ambit of Section 100 (1) of the Central Goods and Services Act, 2017 or West Bengal Goods and Services Act, 2017 (hereinafter collectively called the GST Act ), if aggrieved by this Ruling, may appeal against it before the West Bengal Appellate Authority for Advance Ruling, constituted under Section 99 of the West Bengal Goods and Services Act, 2017, within a period of thirty d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the brochure containing the General Terms of Conditions (hereinafter the GTC) and the prototype of the agreement with a buyer for a HIG unit (hereinafter the Agreement), the Applicant is offering at a single consolidated price construction service based on Standard Built-up Area (SBUA) and the right to use the allotted car parking space. It also includes services associated with preferential location, which means charges, if any, for directional advantage and floor rise. Charges for the right to use the common areas and recreational facilities are also included in the above single consolidated price. Other charges, deposits and taxes are separately recovered. The Applicant s question is limited to what is being offered to the buyers of the HIG category of flats. 2.2 In its Written Submission the Applicant makes out a case for treating the supply of services of directional advantage and benefit of floor rise as integral to supply of construction service. The Applicant provides construction service to a recipient only after the Agreement is signed and other terms and conditions laid down in the Agreement are fulfilled. It is, therefore, absolutely clear from the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eement). The question that needs to be examined is whether they are naturally bundled and are supplied in conjunction with one another in the ordinary course of business and whether the construction supply is the dominant element and all other services in the bundle are ancillary or incidental to the supply of the construction service. 4.2 Actual enjoyment of the construction service and the other services mentioned in the above bundle are separated by time. The other services can be enjoyed only after the supply of construction service is complete. In fact, the buyer of a completed dwelling unit can pay for and enjoy the other services like preferential location and right to use the parking space and the common areas and facilities without having been provided with the construction service. 4.3 Although actual provisioning of the construction and other services are made at different points of time, they can be supplied in a bundle because supply, as defined under section 7(1) of the GST Act, includes agreement to supply even if actual supply is to be made at a future date, provided and to the extent the recipient pays in advance. There is no straight jacket formu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply. Section 2(90) of the GST Act defines principal supply as the predominant element of such a composite supply where all other supplies in the bundle are ancillary to the principal supply. 4.7 There is no doubt that the Applicant is a taxable person and the services offered in the bundle described in para 3.1 are taxable services. It is also clear from the context that construction service is the dominant element in the bundle described in para 3.1 above. Moreover, the recipient, while agreeing to buy these services as a bundle, cannot enjoy the other services unless he agrees to buy the service of constructing the allotted dwelling unit. Furthermore, developers of residential complexes usually offer these services in a bundle. Although one has the option not to pay for the right to use car parking space, he cannot buy it, or for that matter any other service in the bundle, separately. The recipient has to buy these services only as a package, where the construction service remains the predominant element. The buyers of the service of constructing dwelling units in such upscale residential complexes like Avidipta II expect, apart from the preferential location of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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