In re Latest Development Advisory Ltd. (GST AAR Rajasthan)
In the instant case, we find that the applicant is providing services to the society (RWA) in two parts viz. all services of maintenance (other than supply of water) and supply of water. We further observe that as a general practice across trade and market, the maintenance services is inclusive of supply of water and 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).
In view of the above facts, it is observed that the applicant seems to have bi-furcated the services provided to society (RWA) in order to escape the condition of Rs. 7500 per month per member or it might be crossing the GST registration threshold limit of Rs.20 lakh.
We further observe that, in general each society consists of many residential towers, varying floors from three to fifteen plus and further each tower consists of many residential apartments which have a common underground and overhead water storage tank. Even though the applicant might have a separate agreement for supply of water and for receiving charges on the basis of per square feet with the residents of the apartment in a particular tower but it is not possible to supply water to each apartment separately as mentioned in the Contract-II, because the apartments do not have their own separate water storage tanks.
Therefore, in other words supply of water is actually to the Society (RWA) and the applicant is trying to split the Contract into Contract I and II to avoid the GST to facilitate Society (RWA) in order to keep the maintenance charges paid by the residents below Rs 7500/-. Further we also observe that water charges collected from the individual residents are on the basis of per Square feet (size of the flat), instead of per tanker of water, which is similar to the collection of maintenance charges collected by the Resident Welfare Association (RWA).
In view of above it is quite evident that supply of water in Contract-II 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.
FULL TEXT OF ORDER OF BEFORE THE AUTHORITY OF ADVANCE RULING, RAJASTHAN
Note: Under Section 100 of the CGST/RGST Act, 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/RGST Act, 2017, within a period of 30 days from the date of service of this order.
