AAR: GST under RCM allocated on Obtaining of Renting Steady Property Services from SEZs

AAR: GST under RCM allocated on Obtaining of Renting Steady Property Services from SEZs

The Maharashtra Authority of Advance Ruling (AAR) held that GST under contrary charge mechanism allocated on obtaining of renting of immovable property services from Special Economic Zones (SEZs).

The applicant, M/s Portescap India Pvt. Ltd. is a SEZ Unit, situated in Maharashtra, is involved in the manufacture of tailored motors in India and exports the said goods. The Applicant acquires Rental Services from Seepz, SEZ Authority, Mumbai-400096, a Local authority. Notification No. 18/2017-LT. (Rate) dated 5th July, 2017 releases services imported by a unit or a developer in the Special Economic Zone (SEZ) for official operations, from the whole of the Integrated Tax liveable thereon under Section 5 of the IGST Act, 2017.

The applicant has sought the advance ruling on the issue if tax is payable, by the applicant, under reverse charge mechanism on procurement of domestic services like renting of immovable property services from SEEPZ SEZ Authority. It's on accordance with Notification No. 13/2017 – C.T. (Rate) & 03/2018-C.T. (Rate) dated 25th January 2018. If, answer to the above point is in the affirmative, then the tax under reverse charge mechanism is required to be paid under which tax head like IGST or CGST and SGST.

The coram of Rajiv Magoo and T.R.Ramnani held that tax is payable, by the applicant, under reverse charge mechanism on procurement of domestic services like renting of immovable property services from SEEPZ SEZ Authority in accordance with Notification No. 13/2017 – C.T. (Rate) & 03/2018-C.T. (Rate) dated 25th January 2018.

The AAR further clarified that the tax will be cleared by them under Integrated Goods and Service Tax (IGST) head.