CA Manoj Nahata 
- Whether GST payables on sale of spiritual products like religious books, DVD, CD by a religious charitable trust?
Held Yes.
In case of Shrimad Rajchandra Adhyatmik Satsang Sadhana Kendra– AAR Maharashtra held that there was no specific exemption to registered charitable trusts for a supply of such goods under GST. The activities of ‘trade and commerce’ are also part of main objective of the trust. Therefore, the sale of spiritual products could be treated as supply under the GST Act and GST would be applicable to it.
2. Whether GST is payable on membership fee of Lions Club?
Held No.
In case of Lion Club of Poona Kothrud– AAR Maharashtra held that there is no GST liability for the amount collected by individual Lions club and Lions District is for the convenience of Lion members and pooled together only for paying Meeting expenses & communication expenses and the same is deposited in single hank account. The AAR also observed that there is no furtherance of business in this activity and neither any service are rendered goods being traded.
3. Whether GST is applicable on transactions between Head Office & Branches even if no amount is charged like common accounting service, I.T service, marketing service etc.
Held Yes
In case of Columbia Asia Hospitals- AAR Karnataka held that that the services provided by the employees to the employer, the corporate office, have the nature of the employee and employer relationship. Therefore, activities performed by employees of the corporate office for other units of the company shall be treated as supplies as per Entry 2 of Schedule I of the CGST Act. Hence, GST would be applicable even if made without consideration.
4. Whether GST is applicable on compensation received by a tenant for delayed possession of new premises?
Held Yes
In case of Zaver Shankarlal Bhanushali– AAR Maharashtra held that as assessee agrees to do an act the compensation received from the developer for vacating the said premises shall be subject to GST.
Further, the amount received for delayed possession of new premises would be a receipt for tolerating the construction-cum-redevelopment work and for tolerating an act of not completing the redevelopment work within the prescribed time. The same would be covered under the definition of ‘supply’ and, therefore, the GST would be leviable on the said amount.
5. Whether Co-owners needs to take registration if his individual Turnover does not exceed Rs 20 Lakhs?
Held No
In case of Elambrancheri Khaldoon–AAR Kerala held that when the rent is collected together and divided equally between respective co-owners, then the small business exemption for registration under GST is available to co-owners separately.
6. Whether GST is payable on Supply of Food Items to Employees for Consideration in Canteen run by Company?
Held Yes
In case of M/s. Caltech Polymers Pvt. Ltd -AAAR Kerala held that supply of food items to the employees for consideration in a canteen run by the appellant would come under the definition of ‘supply’ as per the GST Act.
Note: Very recently the AAR Maharashtra in case of POSCO India Pune Processing Centre held that GST cannot be levied on sums recovered from staff for benefits. The same will be discussed in my next write up.
7. Whether GST is payable on Penal Interest charged by finance company on default in EMI?
Held Yes
In case of Bajaj Finance Ltd-AAR Maharshatra held that the applicant was engaged in providing various types of loans to customers. The applicant received penal charges on delayed payment of EMIs of loans. The authority held that the amount received as penal charges would not be considered as additional interest and, therefore, was to be treated as ‘supply’ under the GST Act. Therefore, penal Interest on default in EMI payment would be taxable under GST.
8. Whether ITC available for lease rent paid during pre-operative period of leasehold land on which resort was being constructed on his own account and such rent was also capitalized in the books?
Held No
In case of GGL Hotel & Resort Company Ltd-AAR West Bengal held that AS( Accounting Standard) -10 is relevant. It says that the cost of a self-constructed asset should be determined using the same principles as for an acquired asset, and it is usually the same as the cost of constructing an asset for sale. The cost of constructing the immovable asset, therefore, includes the lease rental paid for right to use the land on which the asset is built. Being an integral part of the cost of the immovable property the lease rental paid for the service of right to use the land is a supply for construction of the said property.
Therefore, the lease rental paid during the pre-operative period should be treated as part of the cost of goods and services received for the purpose of constructing an immovable property (other than plant and machinery) on the applicant’s own account. Input tax credit is, therefore, not admissible on such lease rental in terms of section 17(5)(d).
9. Whether services of warehousing, loading, unloading, packing and storage of ‘Tea’ are exempted as ‘agricultural produce’?
Held No
In case of Nutan Warehousing Company (P.) Ltd-AAR Maharashtra held that the activity of processing of raw tea-leaves into tea, results in emergence of a new product which has distinct name, character and use, and such manufactured products cannot be considered as agricultural produce. So warehousing of Tea is not an exempted service under entry sl. No: 54(e) of NN 12/2017- CT (Rate).
Note: Similar matter is pending before Hon’ble Gauhati High Court in a Writ case as well.
10. Whether GST registration is required when a person is engaged in exempt supply except under RCM?
Held No
In case of Joint Plant Committee –AAR West Bengal held that the Applicant is not required to be registered under the GST Act if he is not otherwise liable to pay tax under reverse charge under section 9(3) of the GST Act.
Note: Section 23(1) has got overriding effect over section 22 and section 24(2) has got overriding effect over section 23.
(Source: gstcouncil.gov.in )
