Prinsep Association of Apartment Owners, In re

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The Tax Publishers 2024 TaxPub(GST) 918 (AAAR- West Bengal) IN THE APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL SHRAWAN KUMAR, & DEVI PRASAD KARANAM, MEMBER Prinsep Association of Apartment Owners, In re Appeal Case No. 01/WBAAAR/Appeal/2024 8 January, 2024 Appellant by: Satyanarayan Gupta, CA Respondent by: None ORDER An Appeal filed under section 100 (1) of the West Bengal Goods and Services Tax Act, 2017/ Central Goods and Services Tax Act, 2017, by PRINSEP ASSOCIATION OF APARTMENT OWNERS having GSTIN: 19AAKAP4502F1ZL at 1, New Bata Road, Calcutta Riverside, P.S. Maheshtala, Kolkata - 700140 against the Ruling passed by the West Bengal Advance Ruling Authority vide Order No. 22/WBAAR/2023-24 dated 29-11-2023. This Appeal has been filed by M/s Prinsep Association of Apartment Owners having GSTIN: 19AAKAP4502F1ZL at 1, New Bata Road, Calcutta Riverside, P.S. Maheshtala, Kolkata 700140 against the Ruling passed by the West Bengal Advance Ruling Authority vide Order No. 22/WBAAR/2023-24 dated 29-11-2023 : 2023 TaxPub(GST) 1898 (AAR-WB) (hereinafter referred to as the WBAAR). 2. The matter was originally fixed for hearing on 18-1-2024 which was adjourned upon prayer from the appellant and has been finally heard on 20-3-2024. 3. The Appellant sought an advance ruling under section 97 of the West Bengal Goods and Services Tax Act, 2017/ the Central Goods and Services Tax Act, 2017, (hereinafter collectively referred to as the GST Act‖) as to whether tax would be charged (i) Over and above Rs. 7500 or on the total amount collected from members in light of entry in sl. no. 77 of Notification No. 12/2017 dated 28-6-2017 read with Notification No. 02/2018 dated 25-1-2018. (ii) On amounts collected from the members for setting up a corpus fund for future contingencies/major CAPEX. (iii) On collection of common area electricity charges paid by the members and the same is recovered on the actual electricity charges. 4. The WBAAR while giving the ruling observed that the threshold of Rs. 7500 is applicable for the benefit of exemption under entry in Serial No. 77 of Notification No. 12/2017-Central Tax (Rate) dated 28-6-2017 specifically iterates that the Government intends to provide the exemption only in cases where contribution received from a member per month is below the specified limit of Rs. 7500. In other words, where the contribution exceeds the limit, taxability of such services by RWA shall not get covered by entry number 77 of the aforesaid notification and tax will be leviable on the entire amount collected from the members. Regarding the second issue, the WBAAR observed that a sinking fund is created in order to meet future contingencies e.g., to meet the expenses for structural repairing, reconstruction work etc. RWA creates a sinking fund which serves as a backup fund for supply of specific services. A member contributes to the sinking fund with an agreed condition that the RWA will provide some specific services in future, as and when required out of the said fund. Thus, the amount collected by the appellant from its members for setting up a sinking fund is an advance payment towards future supply of services and such payment comes under the definition of consideration‟ under clause (31) of section 2 of the GST Act. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers 2024 TaxPub(GST) 918 (AAAR- West Bengal)

IN THE APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL

SHRAWAN KUMAR, & DEVI PRASAD KARANAM, MEMBER

Prinsep Association of Apartment Owners, In re

Appeal Case No. 01/WBAAAR/Appeal/2024

8 January, 2024

Appellant by: Satyanarayan Gupta, CA

Respondent by: None

ORDER

An Appeal filed under section 100 (1) of the West Bengal Goods and Services Tax Act, 2017/ Central Goods and Services Tax Act, 2017, by PRINSEP ASSOCIATION OF APARTMENT OWNERS having GSTIN: 19AAKAP4502F1ZL at 1, New Bata Road, Calcutta Riverside, P.S. Maheshtala, Kolkata - 700140 against the Ruling passed by the West Bengal Advance Ruling Authority vide Order No. 22/WBAAR/2023-24 dated 29-11-2023.

This Appeal has been filed by M/s Prinsep Association of Apartment Owners having GSTIN: 19AAKAP4502F1ZL at 1, New Bata Road, Calcutta Riverside, P.S. Maheshtala, Kolkata 700140 against the Ruling passed by the West Bengal Advance Ruling Authority vide Order No. 22/WBAAR/2023-24 dated 29-11-2023 : 2023 TaxPub(GST) 1898 (AAR-WB) (hereinafter referred to as the WBAAR).

2. The matter was originally fixed for hearing on 18-1-2024 which was adjourned upon prayer from the appellant and has been finally heard on 20-3-2024.

3. The Appellant sought an advance ruling under section 97 of the West Bengal Goods and Services Tax Act, 2017/ the Central Goods and Services Tax Act, 2017, (hereinafter collectively referred to as the GST Act‖) as to whether tax would be charged

(i) Over and above Rs. 7500 or on the total amount collected from members in light of entry in sl. no. 77 of Notification No. 12/2017 dated 28-6-2017 read with Notification No. 02/2018 dated 25-1-2018.

(ii) On amounts collected from the members for setting up a corpus fund for future contingencies/major CAPEX.

(iii) On collection of common area electricity charges paid by the members and the same is recovered on the actual electricity charges.

4. The WBAAR while giving the ruling observed that the threshold of Rs. 7500 is applicable for the benefit of exemption under entry in Serial No. 77 of Notification No. 12/2017-Central Tax (Rate) dated 28-6-2017 specifically iterates that the Government intends to provide the exemption only in cases where contribution received from a member per month is below the specified limit of Rs. 7500. In other words, where the contribution exceeds the limit, taxability of such services by RWA shall not get covered by entry number 77 of the aforesaid notification and tax will be leviable on the entire amount collected from the members. Regarding the second issue, the WBAAR observed that a sinking fund is created in order to meet future contingencies e.g., to meet the expenses for structural repairing, reconstruction work etc. RWA creates a sinking fund which serves as a backup fund for supply of specific services. A member contributes to the sinking fund with an agreed condition that the RWA will provide some specific services in future, as and when required out of the said fund. Thus, the amount collected by the appellant from its members for setting up a sinking fund is an advance payment towards future supply of services and such payment comes under the definition of consideration‟ under clause (31) of section 2 of the GST Act.