The West Bengal Authority of Advance Ruling (AAR) has held that 18% GST is applicable on supply fitted assets on hire basis.
The bench of Dr Tanisha Dutta and Joyjit Banik has observed that the supply fitted assets on hire basis includes air conditioning system and the fire extinguishing systems which have been installed in the building have lost its character of a movable property and thereby cannot be regarded as goods.
The applicant, TCG Urban Infrastructure Holdings Private Limited is a real estate development and investment company engaged in development, construction, leasing and sale of commercial properties and providing the fit-outs and related infrastructure on hire to various tenants of the properties held by Bengal Intelligent Parks Private Limited (BIPPL) and BIP Developers Private Limited (BIPDPL), subsidiaries of the applicant in India and providing related consultancy services.
TCG Urban Infrastructure Holdings Private Limited wishes to understand the appropriate classification of services for hiring of fitted assets and corresponding rate of GST to be charged on such provision of services. Hiring of fitted assets inter-alia includes air-conditioning system, fire sprinkler system, DG Sets, electric installations etc.
The applicant sought the advance ruling in respect of the proper classification of the services and rate of tax being provided by the applicant by way of supplying fitted assets on hire basis.
The AAR held that the supply of services as provided by the applicant would be regarded as leasing or rental services and each of the supplies would attract tax @ 18% under serial number 17(viii) of the Notification No. 11/2017– Central Tax (Rate) dated 28.06.2017, as amended, as leasing or rental services and therefore, supplies provided by the applicant, being a mixed supply, would also be taxable @ 18% i.e., supply which attracts the highest rate of tax.
Ruling Details
Applicant Name: TCG Urban Infrastructure Holdings Private Limited
Date: 14/01/2025
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