Appellate Authority for Advance Ruling -— Taxability on various service provided by Municipality  – The appellant is a “Municipality” as defined in clause (e) of article 243P of the Constitution. They are rendering taxable services (viz) renting of immovable property service, mandap keeper service and are doing the functions entrusted to a municipality. The applicant sought an Advance Ruling on taxability and exemption of different services namely Fee from parks, Market fee-daily, market fee weekly, Fees for bays in bus stand (bus stand entrance fee collection), Bus -stand (others), charges for of TV advt. in bus-stand, locker rent provided in bus- stand, flower shop in bus stand in open space, cycle stand, scooter, auto, four wheeler stand in bus stand and other places, collection of room rent for temporary stay, Slaughter house fees, Rent -Travelers’ bungalows & rest house (municipal lodge), Fees on pay & use toilets, Right to fishing in bond, Running a fish market, annual track rent -Cable operator laying fee (optical fibre laying fee), Renting of immovable property. The AAR decided taxability of various services and held that the applicant supplies the ‘Right to collect the fees/right to certain amenities’ to the contractors and the supply undertaken by the contractors are as per the tender conditions which is an independent supply. Being aggrieved on certain points, the appellant filed appeal.

Held that:- The Hon’ble Appellate Authority for Advance Ruling held the service of rent or fee collection for a facility is neither a Supply of Goods nor a supply of Service as per Notification No. 14/2017-CT (Rate). The transaction between the corporation and the contractor is held to be an activity/transaction in relation to the activity/transaction undertaken by the appellant engaged as Public authority and the same are covered under Notification No. 14/2017-CT (Rate) as amended. In respect of charges for TV advt. at Bus Stand; 5C flower Shop at bus stand in open space are covered under SI. No. 7 of Notification No. 12/2017-CT (Rate) as well as charging of tax on RCM basis under SI. No. 5 of Notfn No. 13/2017 CT (Rate). In respect of supply of services of allowing road cutting and the subsequent track renting, the supply would be a ‘Composite Supply’, restricted to this particular activity and not extended to all types of road cutting activities.