GST exempted on Renting of Immovable Property by Municipal Corporation to another State/ Central Govt./ Local Authority: AAR [Read Order]

GST exempted - Immovable Property by Municipal Corporation - AAR - Taxscan

The Tamil Nadu Authority of Advance Ruling (AAR) ruled that the GST is exempted on renting of Immovable Property by Municipal Corporation to another State Government/ Central Government/ Union Territory or Local Authority.

The applicant, M/s. The Erode City Municipal Corporation is registered with GSTIN. The applicant is a “Municipality” as defined in clause (e) of article 243P of the Constitution. They are rendering taxable services (viz) renting of immovable property service, mandap keeper service and are doing the functions entrusted to a municipality under Twelfth Schedule to Article 243W of the Constitution. They have stated to undertake the various services directly/ through contractors by tender process.

The applicant has sought the advanced ruling on various issues in respect of Fee from Parking, Market fee daily, Market fee weekly, fee for bays in bus-stand, slaughter-house fee, municipal lodge, fee on pay and use toilets and for entry vehicle in the market as to whether the services rendered by them directly are covered under Twelfth Schedule to Article 243 W of the Constitution and /or exempted under the Notification.

The Coram of Kurinji Selvan V.S. and B. Senthilvelavan ruled that the applicant supplies the ‘Right to collect the fees/right to certain amenities” to the contractors and the supply undertaken by the contractors are as per the tender conditions which is an independent supply. The applicability of the Notification to the supplies of the contractors is not answered as per Section 95(a) read with Section 103(1) of the GST Act.

The AAR further ruled that Service of renting of immovable property by the applicant to another Central/State government/Union territory or Local authority alone is exempted from tax as per Sl. No. 8 of Notification 12/2017 dated 28.06.2017 and the services of renting of immovable property to other than Central/State Government, Union Territory or Local authority, are not exempted under S.No. 8 of the table to Notification No. 12/2017-C.T. (Rate) dated 28.06.2017.

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