Levy of GST — The applicant sought advance ruling on the following questions:

1. Whether the amount collected towards Local Area Development Fund, which is kept separately and used for development of the affected area as per the guidelines of MNRE, can be treated as not a supply as per the provisions of CGST/KGST/IGST Act 2017 and not levied to tax?

2. Without prejudice to the above, if it is treated as Supply, what will be the HSN/ SAC code under which it would be levied to Tax?

3. Without prejudice to the above, if it is treated as Supply, will it be exempt a per SI.No.3 or 3A of Notfn.12/2017-CT (R) as the activities to be carried out are covered under Article 243 G and / or Article 243 W of the constitution of India?

Held that—

1. The amount collected by the applicant towards LAD fund forms part of value of supply of rental/leasing service and hence is taxable under forward charge mechanism.

2. The applicable SAC for the impugned activity is 997212.

3. The exemption under SI.No.3 or 3A of Notification 12/2017-CentraI Tax (Rate) dated 28.06.2017 is not applicable in the impugned activity, as it is not qualify to be a pure service, provided to Central Government, State Government or Union Territory or Local Authority or a Government Entity by way of any activity in relation to any function under article 243 G or 243 W of the Constitution of India.

4. Payment of GST, under Reverse Charge Mechanism (RCM), under Entry No.5 of Notification No. 13/2017-CentraI Tax (Rate) dated 28.06.2017, on the payments made at the direction of the Committee formed for Local Area Development be considered as service rendered by Government to Applicant, is not applicable to the instant case, as the Government of Karnataka / Local Authority are not involved in provision of any service.

Karnataka Solar Power Development Corporation Limited, In Re… [2020] 22 TAXLOK.COM 063 (AAR-Karnataka)