9911796707
TMI Blog2020 (4) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... hence supply of water provided by the applicant through a separate agreement raises a suspicion in its activity. The reason behind the suspicion is that the water received by the society (RWA) is used for multiple purpose i.e. for gardens, washing cleaning, swimming pool and for the use in the apartments etc. and is stored in the common underground water tank which is maintained by the society (RWA) - it is observed that the applicant seems to have bi-furcated the services provided to society (RWA) in order to escape the condition of 7500 per month per member or it might be crossing the GST registration threshold limit of 20 lakh. The supply of water in Contract-Il and supply of maintenance services in Contract-I are to the same society (RWA) and relevant to each other, hence there appears no case of direct supply of water by the applicant to the individual residents of the society(RWA). Contract-I and Contract-II appears to be directly linked with each other as there is no case of direct supply of water by the applicant to the individual residents of the society therefore the applicant is required to pay GST as applicable on Contract-I. X X X X Extracts X X X X X X X X Extracts X X X X ..... o check with the individual members / them on the need for water supply arrangement. In pursuant thereto, the Applicant will enter into a contract [hereinafter referred to as 'Contract II'] with the individual members (hereinafter known as the 'Customer') for supply of water for personal use. * The Applicant will typically procure such water from tanker water suppliers (hereinafter known as 'vendors') and supply such water to the individual Customers. Considering the fact that there will be no sub-meters it is likely that the Applicant may collect water charges based on the sq. feet area occupied by such Customers/ other suitable basis and will accordingly issue an invoice to the Customers. Contract Il will be optional and hence the Applicant will enter into such contract only with those Customers who desire to procure water from the Applicant. For instance, there may be a society having five wings, in which case, Customers of four wings may choose to procure water from the Applicant and the Customers of the fifth wing may opt for purchasing water from some other source. * In light of the given facts, it important to examine the definition of 'Goods' under the Central Goods and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther words, the activity of the Applicant is simply in the nature of trading of water where on one hand it shall purchase the water from vendors and then supply the same to the Customer. * In order to determine the taxability of such supply, reference is drawn to the Notification 12/2017. The Notification provides list of goods which are exempt from GST. Entry no. 99 of the Notification provides that supply of water other than the specified category is exempt from levy of GST. The water supplied by the Applicant is tanker water and is not covered in any of the above mentioned exclusions form the exemption such as aerated, mineral water, purified water etc. It is pertinent to note that the exemption from GST is a blanket exemption and does not provide for fulfillment of any condition to be eligible for the exemption. Thus, the Notification should be applicable to the transaction proposed to be carried out under Contract Il and hence should be exempt from levy of GST. The above position is also supported by the understanding of the Applicant that generally the vendors from whom the Applicant will procure water do not levy GST when supplying such water to the Applicant. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidual resident of the society (RWA) in same form without any processing on the water purchased. (d) The applicant is claiming that since supply of Water as a goods is exempted from GST in accordance with Notification No. 02/2017 dated 28.06.2017, hence this supply is exempted from GST. (e) The applicant has also submitted that though he is not admitting that there is supply of services in Contract-Il but if it is assumed that there is supply of goods (water) and services involved in Agreement-II, then the supply will be a composite supply of water wherein principal supply will be of water. Since principal supply is exempted from GST, the whole supply of Contract-II is exempted from GST. (f) First, we need to examine whether water is a goods or not. Section 2(52) of GST Act, 2017 defines goods as under- "goods" means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply; We find in view of above definition that supply of water is a supply of goods. Further, the relevant portion of notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of reimbursement of charges or share of contribution up to an amount of ₹ 7500 per month per member for providing services and goods for the common use of its members in a housing society or a residential complex are exempt from GST. Prior to 25th January 2018, the exemption was available if the charges or share of contribution did not exceed ₹ 5000/- per month per member. The limit was increased to ₹ 7500/- per month per member with effect from 25th January 2018. [Refer clause (c) of Sl. No. 77 to the notification No. 12/2018- Central Tax (Rate) dated 28.06.2019] 2. A RWA has aggregate turnover of ₹ 20 lakh or lessin a financial year. Is it required to take registration and pay GST on maintenance charges if the amount of such charges is more than ₹ 7500/- per month per member? No. If aggregate turnover of an RWA does not exceed ₹ 20 Lakh in a financial year, it shall not be required to take registration and pay GST even if the amount of maintenance charges exceeds ₹ 7500/- per month per member. RWA shall be required to pay GST on monthly subscription/ contribution charged from its members, only if such subscription is more than ..... X X X X Extracts X X X X X X X X Extracts X X X X
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