In re Bandai Namco India private Limited (GST AAR Maharashtra)
Question: – Applicable GST Rate on operating gaming zone in one of leading malls in Mumbai?
Applicant submitted that they are engaged in providing amusement facility services and also running family entertainment facility center in Oberoi mail Mumbai. To conduct the business as aforesaid it has stationed various gaming equipment’s and machine for different age groups consisting of kids, teenagers and adults. The equipment’s and machines are either coin operated or card operated in its faculty. It is the submission of the applicant that they are covered under the ambit of ‘amusement park’ and as such qualify for the reduced GST rate of 18%, against 28%, as per the amendment notification. For this proposition, applicant has relied on tax paid (Entertainment Tax) under the BET Act, common parlance test and the VAT rates applied in the Members state of the EU, press release dated 22/01/2018 pursuant to 25th GST Council Meeting.
The word ‘amusement’ being common in the expressions ‘amusement park’ and ‘amusement facility’ it is worthwhile to know the difference between a ‘park’ and a ‘facility’ to arrive at a conclusion as to whether the Applicant’s premises is an ‘amusement park’ or amusement facility’. The meaning of a ‘park’ in various dictionaries say that a park is a large area of land’ used for a particular purpose. Accordingly we have Amusement parks for amusement facility’, wildlife parks for wild animals, industrial parks for setting up industries. The common thread in all these is a large area of land’ where the purpose changes according to its use. On the other hand the dictionary meaning of a ‘facility’ is a place, building, equipment or an amenity for a particular purpose’. It can be understood that, to be called a park, it must have a large area of land whereas to be called a ‘facility’, it is sufficient if it has a place or a building or an equipment used for a particular purpose. Thus we can have a medical facility for treatment, a cooking facility for cooking and an amusement facility having equipment for amusement. In the instant case the applicant has placed equipments in an area within the Oberoi mall. Therefore there is should not be a second thought to call it an ‘amusement facility’ rather than an `amusement park’.
Our view is also supported by the applicant’s own admission to the effect that they are engaged in providing amusement facility services and running family entertainment center in Oberoi Mall. Applicant is also advertising its activities in the public domain as providing amusement facilities. From the above, we conclude that the subject services/activities supplied by applicant by deploying gaming machines and equipments would not fall within the expression, as an ‘amusement park’, but fall under ‘amusement facilities’.
For above discussion the GST rate on operating gaming zone in one of leading malls in Mumbai is @ 28 % w.e.f. 25.1.2018.
AAAR Order-Gaming zone operated in mall premises attracts 28% GST
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, MAHARASHTRA
The present application has been filed under section 97 of the Central Goods and service Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter as “the CGST Act and MGST Act”] by M/s. BANDAI NAMCO INDIA PRIVATE LIMITED, seeking an advance ruling in respect of the following question.
Applicable GST Rate on operating gaming zone in one of leading malls in Mumbai. It the outset, we would like to make it clear that the provisions of both the CGST Act e MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression `GST Act’ would mean CGST Act and MGST Act.
2 FACTS AND CONTENTION — AS PER THE APPLICANT
The submissions, as reproduced verbatim, could be seen thus-
1. FACTS OF THE CASE
The facts giving rise to this ruling are, in a short compass, as follows:
1.1 Bandai Namco Entertainment Inc. (‘BNEI) is a Japanese video game development company and publisher. BNEI also releases videos, music, and other entertainment products related to its intellectual properties (IP). It has the operation in all major countries around the globe including India.
1.2 The Indian arm is operated by means of a private company set-up under the Companies Act. 1956 bearing the name of Bandai Namco India Private Limited (‘BNIPL’ or ‘the Company’ or ‘We’)
1.3 We have registered office at T-01, 3rd Floor, Oberoi Mall. Goregaon East. Mumbai 400063 and are engaged in providing amusement facility services and running family entertainment center in Oberoi Mall, Mumbai since October 2016.
1.4 We have stationed various gaming equipment and machines for different age groups, consisting of kids, teenagers and adults. The equipment and machines are either coin operated or card operated in its faculty.
1.5 The various gaming equipment are classified based on the nature of games involving physical as well as mental skills which are coin operated and card operated such as:
– Kiddie Rides (i.e. Carousel)
– Arcade Games (i.e. Car Drive Game)
– Redemption Games (i.e. Ball Drop Game)
– Play area with entry and exit inside our premises
1.6 A copy of the brochure containing the brief of our gaming zone is enclosed as Exhibit 2.
1.7 We are registered under the provisions of Goods and Services Tax (GST) law in the state of Maharashtra vide GSTIN- 27AAGCB3353EIZX (enclosed herewith as Exhibit 3).
1.8 Prior to the inception of GST in India, we were registered under the provisions of service Tax Law vide Chapter V of the Finance Act 1994 and discharged Service Tax at 15%. A copy of our service tax registration certificate and copy of latest service tax ,return for the period April to June 2017 is enclosed herewith as Exhibit 4 and Exhibit 5 respectively.
1.9 Further, we were also registered under the provisions of Bombay Entertainment Duty Act, 1923 (‘Bombay Entertainment Act’) and paid applicable entertainment tax on the activities undertaking in the gaming zone.
1.10 With the inception of GST in India, both the erstwhile indirect taxes i.e. service tax and entertainment tax are subsumed and the Company is liable to pay GST on its activities as it qualifies as supply of service as per Notification 1/2017-Central Tax (Rate) dated 28 June 2017 (effective 1 July 2017).
1.11 The applicable rate of GST on the services of the Company was 28% i.e., 14% as Central GST (CGST’) and 14% as Maharashtra State GST (MGST’). A sample copy of our GST return in prescribed form GSTR 3B and GSTR 1 for the initial month of July 2017 is enclosed herewith as Exhibit 7.
1.12 A copy of sample invoice generated for this purpose reflecting the amount of GST at 28% is also enclosed as Exhibit 8.
1.13 With the advent of Notification No. 01/2018-Central Tax (Rate) dated 25 January 2018 (‘GST Notification 1/2018′), the entry in respect of amusement parks/facilities have been spilt in to 2 different entries, reproduced below:
