This roundup analytically summarizes the stories related to the Goods and Services Tax Authority for Advance Ruling (AAR) and Appellate Authority for Advance Ruling (AAAR) that were published at Taxscan.in. during the period from December 1st to December 23rd, 2023.
Incentives Received Under “Atma Nirbhar Gujarat Sahay Yojna” are not Subsidy, GST Leviable: AAR In Re: M/s. Rajkot Nagarik Sahakari Bank Ltd. CITATION: 2023 TAXSCAN (AAR) 334
The Gujarat Authority for Advance Ruling (AAR) ruled that the incentives received under “Atma Nirbhar Gujarat Sahay Yojna” are not Subsidy and hence GST is leviable on it.
The two-member Bench of the Authority comprising Sameer Vakil, Member SGST and B V Siva Naga Kumari, Member CGST observed that “”We hold the subject incentive amount liable to GST The said incentive is not a subsidy and does not merit exclusion from valuation under Section 1 5(2)(e) of the CGST Act. The subject supply is covered at Section 7(1)(a) of the CGST Act and not at Section 7(2) of the CGST Act.”
Central Police Canteen is not Unit Run Canteen, liable to pay GST on Goods sold to Authorized Customers: AAR In Re: M/S. CENTRAL POLICE CANTEEN CITATION: 2023 TAXSCAN (AAR) 333
The Karnataka Authority for Advance Ruling (AAR) observed that Central Police Canteen is not Unit Run Canteen and hence is liable to pay CGST on goods sold to authorized customers.
The Two-Member Bench of the Authority comprising Dr MP Ravi Prasad, Member and Kiran Reddy T, Member observed that “In view of the foregoing it is very clear that the notification is applicable only to the Canteen Stores Department under the Ministry of Defence, and not to any other Canteen Stores. In the instant case, the applicant canteen is formed under the orders of Ministry of Home Affairs and thus the notification No.6/2017-Centra1 Tax (Rate) dated 28.06.2017 is not applicable to the applicant and thereby they are not entitled to claim the benefit of the said notification.”
Damages from Tenant towards termination of sub-lease before end of lock-in period amounts to Consideration for Supply, 18% GST Applicable: AAR In Re: Ms. Enzyme Business center CITATION: 2023 TAXSCAN (AAR) 332
The Karnataka Authority of Advance Ruling (AAR) ruled that damages from tenants towards termination of sub-lease before end of lock-in period amounts to consideration for supply and that 18% Goods and Service Tax (GST) is applicable.
The two-member bench of the Additional Commissioner of Commercial taxes Dr. M.P. Ravi Prasad and Additional Commissioner of Customs and Indirect Taxes, Kiran Reddy.T ruled that the damages received by the applicant from the tenant for terminating a sublease before the agreed lock-in period are deemed a supply under Section 7 of the Central GST Act, 2017. It was thus ruled that, The amount received as damages, per the settlement agreement, is considered as consideration for this supply. The services provided by the applicant fall under Chapter heading 9972, attracting GST at 18% (comprising 9% CGST and 9% SGST)
Renting Residential Dwelling Units On Monthly Basis attracts 12% GST: AAR In Re: Ms. DEEKSHA SANJAY CITATION: 2023 TAXSCAN (AAR) 331
The Karnataka Authority for Advance Ruling (AAR) has determined that a 12% Goods and Services Tax (GST) is applicable to the rental of residential dwelling units on a monthly basis.
The bench, comprising M.P. Ravi Prasad representing the State GST and Kiran Reddy, for Central GST, observed that the renting of residential dwellings, particularly to students and working women, with accompanying amenities such as food, furniture, appliances, cleaning, security, pest control, etc., on a monthly rental basis falls under the GST ambit.
Drawing parallels with services offered by hotels, inns, guest houses, and clubs, it was ruled that the services fall under the 12% GST bracket. Notably, the rent charged per person per unit per day is below Rs. 7,500, aligning with the applicable GST rate of 12%.
12% GST Applicable on Services Provided Until 31.12.2021 for Governmental Authority: AAAR In Re: M/s Lakhlan and Qureshi Construction Co CITATION: 2023 TAXSCAN (AAAR) 133
The Rajasthan Appellate Authority for Advance Ruling (AAAR) has held that 12% Goods and Service Tax (GST) is applicable on services provided until 31.12.2021 for Government Authority.
The two-member bench of Mahindra Ranga, (Central Tax) Member and Dr. Ravi Kumar (State Tax) Member observed that The said services are liable to attract GST @ 12% (i.e.6% CGST & 6010 SGST) during the contracted period only up to 31.12.2021 as after that in column no. (3) Of Serial No. 3 of Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017 the words “a Governmental Authority or a Government Entity” have been omitted vide Notification No. 22/2021- Central Tax (Rate) date d 31.12.2021 w.e.f. 01.01.2022.
18% GST Applicable on Recovery of Road Cutting Charges from Jaipur Smart City Limited, rules AAAR In Re: M/s Lakhlan and Qureshi Construction Co CITATION: 2023 TAXSCAN (AAAR) 133
In a recent decision the Rajasthan Appellate Authority for Advance Ruling (AAAR) ruled that 18% GST applicable on recovery of road cutting charges from Jaipur Smart City Limited.
A Two-Member Bench of the Authority comprising Mahendra Ranga, Member Central Tax and Dr Ravi Kumar Surpur, Member, State Tax observed that “We find that the recovery of road cutting charges is not covered under an activity in relation to any function entrusted to a (i) Panchayat under Article 243 G of the Constitution; or (ii) Municipality under Article 243 W of the Constitution.”
18% GST Applicable under RCM for NOC on Road Cutting Charges to Jaipur Nagar Nigam: AAAR In Re: M/s Lakhlan and Qureshi Construction CITATION: 2023 TAXSCAN (AAAR) 133
The Rajasthan Appellate Authority for Advance Ruling (AAAR), observed that 18% GST applicable under reverse charge mechanism (RCM) for No Objection Certificate (NOC) on road Cutting charges to Jaipur Nagar Nigam.
A Two-Member Bench of the Authority comprising Mahendra Ranga, Member Central Tax and Dr Ravi Kumar Surpur, Member, State Tax observed that “In respect of amount paid as NOC for road cutting to Jaipur Nagar Nigam, Clause (b) of sub-section (2) of Section 7 of CGST Act, 2017 read with Notification No. 14/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 16/2018 – Central Tax (Rate) dated 26.07.2018 is not applicable in this case.”
Jaipur Smart City Limited is Governmental Authority u/s 2(16) of IGST Act: AAAR M/s Lakhlan and Qureshi Construction Co CITATION: 2023 TAXSCAN (AAAR) 133
The two-member bench of Mahendra Ranga, (Central Tax) Member and Dr. Ravi Kumar (State Tax) Member observed that M/s Jaipur Smart City Limited is covered under Governmental Authority as defined in the explanation to clause (16) of Section 2 of the IGST Act, 2017.
Supply of Fire Fighting System to Jaipur Smart City Limited is Deemed Service to Governmental Authority: AAAR M/s Lakhlan and Qureshi Construction Co CITATION: 2023 TAXSCAN (AAAR) 133
The Appellate Authority for Advance Ruling (AAAR), Rajasthan ruled that the fire fighting system with pump house Operating & Maintenance supplied by the appellant to M/s. Jaipur Smart City Limited is to be considered a service to a Governmental Authority.
The authority bench ruled that this falls within the scope of Item number (vi) in Column (3) of serial number 3 of Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017, as amended by Notification No. 24/2017 – Central Tax (Rate) dated 21.09.2017.
Bombay HC quashes Order of Deputy Commissioner of Customs in Neglect of AAR Ruling of Assessee Isha Exim carrying on business VS Union of India through CITATION: 2023 TAXSCAN (HC) 2017
Recently, the Bombay High Court has overturned the customs deputy commissioner’s decision that diverged from the ruling issued by the Authority of Advance Ruling (AAR).
The court underscored the assessee’s right to invoke writ jurisdiction under Article 226 of the Constitution, even with an alternative statutory remedy available. Grounds for invoking writ jurisdiction include breaches of fundamental rights, natural justice violations, orders passed without jurisdiction, or challenges to the statute’s vires.
The court determined that the department’s action, contrary to Section 28J provisions, lacked jurisdiction, rendering the Order in Original invalid.
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