Page 26 - Banking Finance July 2023

LEGAL UPDATE

Further, cases where there was an action relating to the car park as a countable with specific key perfor-
addition to the income during an ear- composite supply, the GST levy that mance indicators established by the
lier assessment year on a recurring is- would have been applicable would be governance oversight of the Authority.
sue of law or due to some specific facts that of primary supply of construction,
The IEPFA has acknowledged that the
before tax officials, also need to be which is lower.
refund process involves multiple stake-
picked up for complete scrutiny.
According to Anita Rastogi, principal holders, and the main service provid-
The income tax department takes up (indirect taxation) at Price ers operate on different electronic
specific types of cases for complete Waterhouse-India, the impact of this platforms that are not interoperable.
scrutiny, while relying on random scru- ruling is that buying homes with park- As a result, the data flow is not seam-
tiny of a small percentage of returns ing spaces will be costlier. "Some build- less, and the refund process exceeds
that are filed every year. The guidelines ers may adopt a cautious approach and the legally mandated time period. An
for compulsory selection indicate that charge 18% GST in respect of car park- efficient market relies on the ability of
the authorities are keeping tabs on ing space." market participants to make informed
some specific group of taxpayers to investment decisions, which includes
In this case, the real estate developer
ensure that they report their income awareness of the ecosystem as well as
submitted that the car parking space
the associated risks, rewards, rules,
accurately.
is only given to flat buyers and stamp
and regulations.
The guidelines for the current financial duty is paid on the entire consider-
The SC appointed committee said
year have stated that cases where sur- ation. However, the AAAR bench ob-
there has been a substantial increase
veys or search and seizure have been served that prospective flat buyers
in the futures and options segment
undertaken or where notices have may or may not opt for a car parking
which entails higher risk and
been issued under section 142(1) of the space when booking their flat.
specialised knowledge of the market.
income tax law, seeking details, should
SC panel moots a central
be taken up.
Bombay High Court vali-
authority to handle un-
Flat buyers will face 18% dates IGST provisions for
claimed private assets
GST on open car park sale The Government should set up a intermediary services
The West Bengal bench of the Appel- centralised authority to handle and The Bombay High Court settled the is-
late Authority of Advance Rulings process unclaimed private assets on sue of Integrated Goods & Services Tax
(AAAR) has upheld an earlier ruling and the lines suggested for creating the (IGST) on intermediary services.
said that sale or right to use a car park Central Authority for Unclaimed Prop- After a division bench divided over the
is not naturally bundled with construc- erty, the SC appointed-committee to issue, the third judge upheld the con-
tion services. probe Hindenberg-Adani saga said in stitutional validity of provisions related
its report.
Thus, it will not be treated as a com- to IGST making it 2:1 in favour of va-
posite supply and will attract GST at the According to the committee's findings, lidity.
higher rate of 18%. The AAAR's ruling there are unclaimed shares amounting However, experts feel the big chal-
came in an appeal by Eden Real Es- to Rs. 47,000 crore and cash totaling lenge would be who will levy the tax.
tates, which is engaged in construction nearly Rs. 5,200 crore. The Investors Also, this would require amendment in
of residential apartments. Education and Protection Fund Author- law or rules.
ity (IEPFA) is manned by a CEO holding
From April 1, 2019, GST is levied at 5% Considering the views taken by Justice
additional charge and has a dozen of-
on non-affordable housing projects G S Kulkarni and one of the members
ficers.
without input tax credit (ITC). For on- of the division bench (Justice Abhay
going projects (as in this case), the However, the committee believes that Ahuja), “we hold the provisions of Sec-
builder has the option to pay GST at the current officer strength is dispro- tion 13(8)(b) and Section 8(2) of the
the old rate of 12% with ITC, which portionately small. Therefore, the IGST to be legal, valid and constitu-
means taxes paid on inputs can be set IEPFA should have a full-time Chief Ex- tional,” a division bench of Justices
off. Had the AAAR treated the trans- ecutive Officer who would be held ac- Ahuja and Sunil B Shukre said.

24 | 2023 | JULY | BANKING FINANCE