Other charges collected along with construction services are liable to GST @ 18%

The issue of rate for levy of GST on construction service has always been a matter of concern for all.

Three is a recent AARm Maharashtra ruling in Puranik Builders Ltd. (GST AAR Maharashtra) as under:

‘Construction services’ and the ‘other services’ (legal fees, development charges etc.) provided by the applicant (Builders & Developers) are not naturally bundled and are not supplied in conjunction  with each other in the ordinary course of business with main supply.

These are the facilities/amenities provided by the applicant to its customers for the limited period because, for these facilities created the customers have not been given perpetual rights as per the said agreement.

The amount or consideration is charged separately for different services. And even the stamp duty is also not paid on full amount collected from the customer along with the said other charges.

Therefore, the other charges for the other services provided is *not covered under the scope of ‘Composite supply of services’.

Therefore, the contention of the applicant is found not acceptable and they are liable to GST @ 18%. Further applicants are not eligible for 1/3rd deduction of land value as the entries applicable to both of the above services are different.