• Home
  • Article
  • Other Services not part of Composite supply with Main Construction Service, chargeable to GST @18%

CA Bimal Jain | Sep 11, 2021 | Views 1303489

Other Services not part of Composite supply with Main Construction Service, chargeable to GST @18%

Other Services not part of Composite supply with Main Construction Service, chargeable to GST @18%

In M/s Puranik Builders Pvt. Ltd. [Order No. GST-ARA-68/2019-20/B-52 dated August 27, 2021], M/s Puranik Builders Pvt. Ltd (“the Applicant”) has sought clarification on the issue of whether the charges other than that of consideration of main construction activity – like water connection charges, club house maintenance charges, share of municipal taxes, infrastructure charges, club house charges etc. (“the other charges”) are to be treated as consideration for construction services of the Company and classified along with the main residential construction services of the Company or whether it would be treated as consideration for independent services of the respective head. Consequently, what will be the applicable effective rate of Goods and Services Tax (“GST”) on services underlying the Other Charges.

The Hon’ble Maharashtra Authority for Advance Ruling (“MAAR”)   noted that when the question arose to pay stamp duty, the Applicant did not treat these Other Charges as part of main supply, however when it came to payment of GST, the Applicant contended those other charges to be a part and parcel of main construction service. The party cannot be permitted to shift stands as per their convenience.

Observed, the “Other Charges” are different from the service of construction of residential flats. It cannot be said to be naturally bundled and supplied in conjunction with each other. The amount and consideration is separately for different services. Therefore, the Other Charges are not covered under “Composite Supply of Services”.

Further observed, the Other Charges are held taxable as per their SAC under the GST Act, at 18% in terms of the respective and appropriate entries in Notification No.11/2017 CT (R) dated June 28, 2017 (“Services Rate Notification”) as they are covered under services, other than construction services.

DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose and for the reader’s personal non-commercial use. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon. Further, no portion of our article or newsletter should be used for any purpose(s) unless authorized in writing and we reserve a legal right for any infringement on usage of our article or newsletter without prior permission.

StudyCafe Membership

Join StudyCafe Membership. For More details about Membership Click Join Membership Button

Join Membership

In case of Any Doubt regarding Membership you can mail us at [email protected]

Join Studycafe's WhatsApp Group or Telegram Channel for Latest Updates on Government Job, Sarkari Naukri, Private Jobs, Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!"

Author Bio

My Recent Articles

Actions taken by the department during enquiry need not necessarily be termed as harassment Who are liable to generate e-invoice w.e.f October 1, 2022 Personal penalty cannot be imposed on the Chairman of the Company for failure in ensuring proper accounting of the goods Stayed the order of cancellation of GST Registration of the assessee for continuing the trading activities Can CA be arrested- Section 69 vs Section 132 of the CGST Act View All Posts

Leave a Reply