The Tamil Nadu Authority of Advance Ruling has held that no Goods and Service Tax (GST) is payable by the Municipality on the activities of Maintenance of Park, Providing Market facilities-daily, Providing Market facilities-weekly, Providing bays in bus stand, lLocker rent facilities, Providing Slaughterhouse facilities, Providing Toilet facilities, Providing stand for cycle, scooter, auto, four wheeler stand in bus stand and other places.
The bench of B. Senthilvelavan and Kurinji Selvaan V.S. has observed 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 S. 103(1) of the GST Act.
The applicant, M/S. Tiruppur City Municipal Corporation is a “Municipality” as defined in clause (e) of article 243P of the Constitution. They are rendering taxable services 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.
The applicant has stated that there are two charges collected road cutting charges towards laying of cable and (i) renting of road for the optical cables. Their claim is renting of space for laying cable is the principal supply and therefore applying the definition of ‘composite Supply’ under S.230) of the GST Act, road cutting charges has to be treated as renting and the whole service has to be classified as renting of immovable property.
The AAR has held that supply of allowing the road cut for laying the OFC and allowing the space alongside the road for the OFC lines are not ‘composite supply’ as defined under S. 2(30) of the GST Act, 2017 in as much as these two supplies are not made in conjunction with each other in the ordinary course of business. Hence Composite supply cannot be applied for classifying the said service as ‘Renting of Immovable property service’.
Ruling Details
Applicant Name: Tiruppur City Municipal Corporation
Date: 28.04.2021
