External Development charges would form part of construction services: AAAR

Case Details: Appellate Authority for Advance Ruling, Haryana Ashiana Housing Ltd., In re - [2022] 138 taxmann.com 92 (AAAR-Haryana)

Judiciary and Counsel Details

• • Shekhar Vidyarthi & Suresh Kishnani, Member
  • Ms. Priyanka Singhla, Adv. for the Applicant.

Facts of the Case

The appellant was engaged in the construction of residential complexes. It filed an application for advance ruling to determine whether the statutory charges i.e. External Development Charges (EDC) and Infrastructural Development Charges (IDC) recovered by the appellant from buyers and paid further to respective Government Authorities would form part of value of taxable supplies being made by it.

AAR Held

The Authority for Advance Ruling (AAR) held that these statutory charged would form part of value of taxable supplies and GST would be payable. It filed appeal against the order of AAR.

The Appellate Authority for Advance Ruling (AAAR) observed that there is specific section 15 of CGST Act which authorises the inclusion of such fee or Charges or Levies etc. in the value of Supply of Service. In the instant case, EDC and IDC charges would form a ‘consideration’ for the construction service provided in respect of the flats. Therefore, the appeal was liable to be dismissed and ruling of AAR was upheld.

List of Cases Reviewed

• • Ashiana Housing Ltd., In re [2021] 128 taxmann.com 222 (AAR – GST – Haryana) (para 22) affirmed.

List of Cases Referred to

• • Anand Swarup Mahesh Kumar v. Commissioner of Sales Tax 1980 taxmann.com 262 (SC) (para 8)
  • GMR Hyderabad International Airport Ltd. v. CC, CE & ST [Order No. A/30739/2019, dated 16-9-2019] (para 8)
  • CCE v. Super Synotex (India) Ltd. [2014] 43 taxmann.com 140/44 GST 240 (SC) (para 13).