2026-VIL-58-AAR
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SGST High Court Cases

GST – Karnataka AAR – RWA, Housing Society - Exemption under Entry 77 of Notification No. 12/2017-Central Tax (Rate) on amount of Rs.7,500/- collected on annual basis - Whether the availability of exemption up to an amount of Rs.7,500/- per member per month under entry No.77 of Notification 12/2017 - Central Tax (Rate) dated 28-06-2017, as amended is to be ascertained on per annum basis i.e. 90,000/- (7500x12) per financial year per member or on the basis of invoicing period i.e. Monthly/Quarterly Invoicing – HELD - the exemption of Rs.7,500 per month per member, in respect of sourcing of goods or services from a third party for the common use of its members in a housing society or residential complex, is available on a monthly basis, irrespective of the pattern of issuance of invoices, whether monthly or quarterly – Ordered accordingly - Whether contribution collected from members for supply of water procured through water tanker or BWSSB are covered under entry no. 99 of Notification.2/2017 Central Tax (Rate) dated 28-06-2017, as amended i.e. under HSN Code 2201 and therefore exempt - HELD - As per Section 2(30) of the CGST Act, 2017, a composite supply consists of two or more supplies which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. In the present case, the principal supply is upkeep and maintenance services, and the supply of water is ancillary thereto. Accordingly, the entire consideration collected from the members, including amounts attributable to water supply, forms part of the value of the composite supply, the principal supply being services classifiable under SAC 999598. Therefore, the exemption under Entry No. 99 of Notification No. 02/2017-Central Tax (Rate) is not applicable to the applicant - Whether the applicant is liable to pay GST on amounts which it collects from its members for setting up a corpus fund/sinking fund which is in form of deposit – HELD - An advance is generally a payment made upfront toward a future supply and is typically non-refundable, whereas a deposit is ordinarily refundable and held as security, subject to return upon occurrence of specified conditions - The amount collected towards the corpus fund are indisputably in the nature of advances for future supply of service and not deposits. The corpus fund collected by the applicant for future contingencies constitutes consideration for a future supply of services and, therefore, attracts GST in terms of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, under SAC 999598 - Whether the application of deposit towards consideration at the time of actual supply of service (Capital asset purchase) can be proportion to the depreciation charged in books of accounts in relation to a capital asset – HELD - Accounting treatment or depreciation practices do not determine the GST liability or timing, which is governed by the provisions of the CGST Act. the applicant’s argument that GST should be levied only in proportion to depreciation over the life of the capital asset is not supported by the provisions of the CGST Act. Taxability must be determined based on the existence of a supply, the time of supply as per Sections 12 or 13, and the consideration attributable to such supply, independent of accounting treatment or depreciation practices - Whether the exemption up to an amount of Rs.7,500 per member per month for sourcing of goods or services for the common use of members under Entry No. 77 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended) is available in respect of sinking/ repair fund contributions collected from members, either at the time of actual supply of services when such deposits are applied as consideration or at the time of collection treating them as advances – HELD - the amount collected by the applicant from its members towards sinking fund/corpus fund constitutes an advance received against future supply of services to its members. Accordingly, the time of supply is determined at the time of receipt of such advance, in terms of Section 13 of the CGST Act, 2017 - the amounts collected towards sinking fund/corpus fund are not required to be clubbed with common area maintenance charges for the purpose of determining eligibility for exemption under Entry No. 77 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended - Whether voluntary contribution received from members for celebration of cultural festivals is liable to GST – HELD - the voluntary donations collected by the applicant do not involve any quid pro quo, as the applicant is not under any contractual or statutory obligation to provide any goods or services in return for such donations. The contributions are made at the discretion of the members and are not linked to any specific supply. In view of the above, the voluntary donations collected by the applicant from its members for the celebration of cultural festivals do not constitute consideration for any supply and, therefore, are not liable to GST.
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