Case Law Details
In re Richwell Enterprises Private Limited (GST AAR Rajasthan)
‘Construction services’ and the ‘ancillary services’ provided by the applicant are not naturally bundled and are not supplied in conjunction with each other in the ordinary course of business with main supply. These are the facilities/amenities provided by the applicant to its customers for the limited period because, for these facilities created the customers have not been given perpetual rights. The amount or consideration is charged separately for different services. Therefore, the other charges for the ancillary services provided is not covered under the scope of ‘Composite supply of services’. Therefore, the contention of the applicant is found not acceptable.
In view of above, the other charges to be charged for ancillary services’ mentioned as above are held taxable as per their SAC under the GST Act, at 18% in terms of the respective and appropriate entries (against the SAC mentioned in the Table at Para No. 17 above) in notification No. 11/2017-CT(R) dated 28.06.2017 as they are covered under services, other than construction services.
Therefore, in our view, the consideration for providing the construction services by way of construction of residential unit and the consideration for the ancillary services (i.e. other charges collected) are considerations against separate independent services being provided by the applicant. Considering the nature of supplies in question, the services for each of the service head/description are covered under notification No. 11/2017-CT(R) dated 28.06.2017 mentioned above and therefore, the Other Charges would attract GST @18%. Thus, the l/3rd deduction from total value as per Sr. No. 2 of the Notification (as claimed by the applicant) cannot be allowed as deduction from the Other Charges. A plain reading of the items or the list of other charges itself shows that ancillary services supplied against the said charges have no connection with land and therefore, question of considering the 1 /3rd deduction or rebate towards land cost does not arise, particularly, as the entries applicable to both of the above services are different.
As tar as availability of Input Tax Credit (ITC) on goods & services received for supply of the ‘ancillary services’ is concerned, we are of the view that as ‘ancillary services’ are subject to outward tax liability at the rate of 18% (without any abetment) therefore, as per Section 16 of the CGST and RGST Act, the applicant shall be eligible to take ITC of the GST paid on goods or services used or intended to be used in the course or furtherance of business subject to the conditions as prescribed and the provisions of sub section 5 of the Section 17 of the GST Act.
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