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The other charges which are inextricably linked to services by way of construction of residential apartment /dwelling are part of a bundled service with principle service of construction of residential apartment /dwelling. The rate of tax applicable on such services would be 12% as applicable to the construction service.

Authority for Advance Ruling – Construction Services – The applicant is engaged in the business of construction and sale of residential apartments and discharge Goods and Services Tax (GST) in respect of supply of construction services in respect of residential units for which consideration is received before receipt of Occupancy / completion Certificate. The applicant sought an Advance Ruling as to whether the Other Charges received by the company will be treated as consideration for construction services of the Company and classified under HSN 9954 along with the main residential construction services of the Company or whether the same will be treated as consideration for independent service(s) of the respective head; consequently, what will be the applicable effective rate of GST on services underlying the Other Charges.

Authority for Advance Ruling held that:- Other Charges received will not be treated as consideration for construction services of the Company and is not classified under SAC 9954 along with the main residential construction services. The other charges will be treated as consideration received against supply of independent service(s) of the respective heads. Appellate Authority for Advance Ruling, Maharashtra partly set aside theorder of AARa and held that the other charges which are inextricably linked to services by way of construction of residential apartment /dwelling are part of a bundled service with principle service of construction of residential apartment /dwelling. The rate of tax applicable on such services would be 12% as applicable to the construction service. The other charges that don't pass the muster of indicators of a bundled service are held as supply of independent services. They are to be taxed as per the respective SAC codes and rate of tax thereon. As per the submission of the appellant, he has collected 18% of GST on the supply of such services. In respect of services which are allowed as bundled services, the present decision implies an excess collection of tax. It is hereby directed that the Appellant to Refund the excess tax collected to the customers. Thus, the appeal filed by the Appellant is, hereby, partly allowed.

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