Other Services not part of Composite supply with Main Construction Service, chargeable to GST @18 percent

Last updated: 10 September 2021

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The Maharashtra Authority for Advance Ruling (MAAR) has determined that charges like water connection fees, club house maintenance, and municipal taxes are not part of the main construction service for GST purposes. The ruling stated that these 'other charges' are for independent services and cannot be considered a composite supply with the main construction activity. Therefore, they are taxable separately at an 18% GST rate.

Court :
Maharashtra Authority for Advance Ruling (MAAR)

Brief :
In M/s Puranik Builders Pvt. Ltd. [Order No. GST-ARA-68/2019-20/B-52 dated August 27, 2021], M/s Puranik Builders Pvt. Ltd ("the Applicant") has sought clarification on the issue of whether the charges other than that of consideration of main construction activity - like water connection charges, club house maintenance charges, share of municipal taxes, infrastructure charges, club house charges etc. ("the other charges") are to be treated as consideration for construction services of the Company and classified along with the main residential construction services of the Company or whether it would be treated as consideration for independent services of the respective head. Consequently, what will be the applicable effective rate of Goods and Services Tax ("GST") on services underlying the Other Charges.

Citation :
Order No. GST-ARA-68/2019-20/B-52 dated August 27, 2021

Daily Limit Reached