586
July 13 To July 19, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 60given in the CGST Rules, 2017 to determine
the value for transactions undertaken by the
distinct persons, ‘open market value’ can
be taken as value of supply of goods or
services. Further, if the recipient is eligible
for input tax credit (ITC), invoice value shall
be deemed to be open market value of the
goods. In this case, the applicant intends to
issue invoice declaring value of supply liable
to GST and recipient is eligible to claim ITC.
The Authority for Advance Ruling, Maharashtra
held that invoice value to be considered as
open market value in respect of goods supplied
by one entity to another where recipient is
eligible to claim full ITC. ITC ofGSTpaidonmaterialsused
for epairr &maintenanceofbuilding
not vailablea totheextentbeing
capitalizedRambagh Palace Hotels (P.) Ltd., In re [2019]
106 taxmann.com 172 (AAR - Rajasthan)
The applicant is a hotelier rendering services
such as short term accommodation service,
Mandap keeper service, Restaurant service,
SPA and providing other club facilities,
renting of space or lawn, etc. The Applicant
often requires repair and maintenance of the
building and its components to maintain
higher standards of hospitality service. The
Applicant has sought advance ruling to
determine whether GST paid on building
materials such as cement, concrete, bricks or
marble, paint, polish and any other building
materials meant for repair of building shall
be available for input tax credit?
The Authority for Advance Ruling, Rajasthan
observed that the nature of work undertaken
by the applicant is in respect of immovable
property involving transfer of goods for
carrying out repair and maintenance work.
As per the provisions of blocked credits under
GST, input tax credit (ITC) is not available
for construction, reconstruction, renovation,addition, alteration or repair of an immovable
property even when such goods or services
or both are used in course or furtherance of
business. However, the limitation in such a
case is to the extent of capitalization to the
said immovable property. In this case, repair
and maintenance of building encompasses
supply of goods for construction purposes.
The Authority for Advance Ruling, Rajasthan
held that the ITC of GST paid on materials
used for repair & maintenance of building
shall not be available to the applicant to the
extent being capitalized. Workundertakenforsiteprepa-
rationisaworkscontractservice
classifiedunderSAC99543,taxable
at 18%GSTAshis Ghosh, In re [2019] 106 taxmann.com
381 (AAR - West Bengal)
The Applicant has received contract for
filling in the compound, tank, low land etc.
with silver sand and earth work in layers,
including spreading, compacting the same.
The Applicant has sought advance ruling
whether the above service can be classified
as supply of sand under HSN 2505?
The Authority for Advance Ruling, West
Bengal observed that the work awarded to the
Applicant also involves earth work for filling
in the compound, tank, low land, ditches etc.
with good earth spread in layers and also
consolidating the same. It is not a contract
for the supply of goods, but the transfer
of property in such goods in the course of
preparing the site for construction. Therefore,
it amounts to improving and modifying land
which is an immovable property and is a
works contract as per the CGST Act, 2017.
The Authority for Advance Ruling, West
Bengal held that the work undertaken by the
applicant can be classified as site preparation
service under SAC 99543, taxable at 18% GST.WEEKLY REVIEW