9911796707
TMI Blog2021 (3) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... rs; the corpus fund or sinking fund is mandatory under the Bye-laws of the Co-operative Societies / Resident Welfare Associations and is in the nature of deposit towards unforeseen events or planned events. Further, the applicant relies upon the ruling of this authority in the case of M/s. Prestige South Ridge Apartment Owners' Association, Bengaluru. Whether the amounts collected by the applicant towards sinking fund form part of consideration towards the services being provided by them? - HELD THAT:- There are certain distinguishable features of both advance and deposit and advances defer from the deposits. The amounts that are not returnable can be termed as advances. Also the bye laws of the applicant association are silent on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ium and the Applicant is duly registered under the provisions of the Karnataka Apartment Ownership Act, 1972 ( KAOA Act'). The applicant is also registered under GST Act. The applicant submits that in addition to the regular maintenance, they also required to undertake periodic up-keep of the structure of the building by painting the exterior/ common areas; replacement/ repair of major equipment such as lifts, generators etc., for which they collect certain amount towards Sinking Fund from the members, under its bye-laws to meet the aforesaid planned/unplanned capital outlay in future. The accounts of the said sinking fund will be maintained separately and will be utilized for the specific purpose but not for the regular maintenance a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4.3 The applicant also collects certain amounts towards sinking fund, in addition to regular maintenance amounts, to meet the expenditure of planned / unplanned outlay in future, under its bye-laws. 5. Applicant's Interpretation of Law: 5.1 The Applicant submitted that they perform the duties in accordance with the provisions of the KAOA Act and on the basis of its Bye-laws that are duly declared/approved. The Bye-laws of Applicant provides for collection of deposits from members in the form of 'Sinking Fund', to meet certain future unforeseen or planned events. Thus the Applicant is performing the activities as mandated under the Statute and not on the basis of any contract between itself and its members. 5.2 Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Authorized Representative of the applicant appeared for personal hearing proceedings held on 28/01/2021 and reiterated the facts narrated in their application. FINDINGS DISCUSSION 7. We have considered the submissions made by the applicant in their application for advance ruling. We also considered the issues involved, on which advance ruling is sought by the applicant and relevant facts. At the outset, we would like to state that the provisions of both the CGST Act and the KGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the KGST Act. 8. The Applicant so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; (b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply; The proviso to Section 2 (31) above states that the deposit given in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Now we proceed to decide the classification of the service to be provided by the applicant as the taxability of the amounts collected towards sinking fund has already been decided at para 12 supra. SAC 9995 covers the services provided / to be provided by the applicant to its members under Services of Membership Association . The said services are taxable to GST @ 18% in terms of Sl.No.33 of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017, as amended. 14. In view of the foregoing, we rule as follows RULING The amounts collected by the applicant towards Sinking Fund amount to advances meant for future supply of services to members, covered under SAC 9995 as Services of Membership Association and are taxable to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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