2018 (10) TMI 595 – AUTHORITY FOR ADVANCE RULINGS, KERALA – 2018 (18) G. S. T. L. 152 (A. A. R. – GST) – Renting of immovable property service – Small Business Exemption – Co-owners – Whether small business exemption under Section 22 of the GST Act is available to all owners separately in case of jointly owned property?
–
Whether engaging a co-owner to collect and distribute rent among all the owners for administrative convenience will have any implication on the business exemption under Section 22 of the GST Act for individual co-owners?
–
Held that:- The rent collected from joint property is equally distributed among the co-owners. Each co-owner received a rent income of below ₹ 20 Lakhs, which is below the threshold limit under GST. By mere joining of hands of two or more persons, a different and distinct legal entity or legal personality does not come into existence, unless there is an intention to do so.
–
A co-owner holding immovable property jointly with other
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
KER/12/2018 Dated:- 19-9-2018 – SHRI. B.G. KRISHNAN AND SHRI. B.S. THYAGARAJABABU MEMBER Authorized Representative: Mr. Rinu Padat, Chartered Accountant. The petitioner is one of the co-owners of a jointly owned immovable property. There are 13 co-owners holding equal share in 86.78 Cents of land and building. They have rented out these properties to different parties. Total rent from all these properties exceed twenty lakh rupees in a financial year. But, individual share is not exceeding the said threshold. Now, the owners are planning to engage one of the co-owners to collect rent and distribute among them for the purpose of administrative convenience through execution of a power of attorney. In the circumstances, an advance ruling is sought in respect of the following: i) Whether small business exemption under Section 22 of the GST Act is available to all owners separately in case of jointly owned property. ii) Engaging a co-owner to collect and distribute rent among all the owne
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
t. In this case also, a co-owner is engaged to collect rent from tenants and distribute among others just for administrative convenience, but the share of each owner is definite and ascertainable. The issue is examined in detail. The rent collected from joint property is equally distributed among the co-owners. Each co-owner received a rent income of below ₹ 20 Lakhs, which is below the threshold limit under GST. By mere joining of hands of two or more persons, a different and distinct legal entity or legal personality does not come into existence, unless there is an intention to do so. It is settled law under Section 26 of the IT Act that where the property, consisting of buildings and land appurtenant, is owned by two or more persons and their respective shares are definite and ascertainable, such persons shall not, in respect of such property, be assessed as an association of persons, but the share of each such person in the income from the property is included in his total in
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =