Supply Of Services For Right To Use Car Parking Space Attracts 18% GST: West Bengal AAR

The West Bengal Authority for Advance Ruling (AAR) has held that the supply of services for the right-to-use car parking spaces attracts 18% GST.

The two-member bench of Brajesh Kumar Singh and Joyjit Banik has observed that the supply of services for the right to use a car parking space is a separate supply and not to be construed as a composite supply of construction of residential apartment services.

The applicant is in the business of constructing residential apartments intended for sale to buyers. Prospective buyers are given the option of booking car parking in addition to the apartment. Buyers who choose to use the car parking facility are also charged a fee for the right to use a parking space. It is included in the applicant's total consideration for the sale of the apartment.

The applicant sought an advance ruling on whether the amounts charged by the applicant for the right to use car or two-wheeler parking spaces, in conjunction with the sale of unfinished apartments, constitute a composite supply or a distinct supply.

The applicant has also sought an advance ruling with respect to the applicable GST rate.

As per Section 2(30) of the CGST Act, 2017, "composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services, or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.

The AAR held that if there remains any unallotted car parking space after allocation among the intending buyers, it is offered to allottees desiring additional car parking space. The supply is altogether a separate service and cannot be treated as naturally bundled with the construction services.

Applicant’s Name: Eden Real Estates Private Limited

Date: 22.12.2022

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