The Gujarat Authority of Advance Ruling (AAR) ruled that GST payable on development & construction of sports complex for Ahmedabad Urban Development Authority (AUDA).
The applicant, M/s. Tirupati Construction has submitted that the activity of “construction of sports complex” is a supply of service within the meaning of Section 7(1)(a) of the CGST Act, 2017 read with Section 2(102) of the said Act. The said supply of service is an intra state supply within the meaning of Section 8(2) of the IGST Act, 2017 and is chargeable CGST under Section 9 of CGST Act, 2017 and SGST under Section 9 of CGST Act, 2017.
The applicant has sought the advance ruling on the issue of the activity of composite supply of work contract service by way of development and construction of sports complex at Maninagar, Ahmedabad for the Ahmedabad Urban Development Authority, and as detailed in the tender document merit classification at Sr. No. 3(vi)(a) of Notification No. 11/2017-CT (Rate) dated 28.06.2017.
The coram of Members Sanjay Saxena and Arun Richard observed that the commercial uses of an already existing Sports complex at Bopal location as detailed in previous pages. We note the chargeable bookings and their rates, the non refundable nature of bookings too. With the plain reading of the inclusive definition of the word ‘business’ in CGST Act with the nature of commercial activities in which AUDA is involved as evidenced with the above illustration, with nothing to dissuade us from what is a glaring and clear illustration of activity of AUDA w.r.t. a sports facility already existing.
“We note that the explanation to said entry of the Notification wherein the term ‘business’ shall not include any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities and does not cover Government Authority. We cannot allow any scope for intent. The subject Supply does not merit to be entertained at subject Serial Number 3(vi)(a) of said NT (as amended from time to time),” the AAR said.
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