Case Details:

Greenwood Owners Association vs. Union of India

Appeal No.:

WP No. 5518 & 1555 of 2020

Order pronounced by:

Madras High Court

Date of Order:

01-07-2021

The petitioner had approached the AAR seeking clarification whether GST shall be chargeable on the amount collected from the members only in excess of Rs. 7500 or on the entire amount where the amount collected from members exceeds Rs. 7500. The AAR held that the grant of exemption was conditional upon the contribution being an amount of Rs. 7500 or less. If the contribution exceeded Rs. 7500, then the very entitlement of exemption would stand defeated and the entirety of the amount collected would have to be brought to tax. As such, GST shall be paid at the appropriate rates on the full amount of contribution made by the members. Taking inspiration from the AAT, the CBIC came out with a circular on the same lines.  In this respect, the petitioner filed a petition with the Hon’ble High Court to seek ruling.

• In the case of Dilip Kumar (supra), the Supreme Court reiterates the settled proposition that an Exemption Notification must be interpreted strictly. The plain words employed in Entry no. 77 being, ‘upto’ an amount of Rs. 7500 can thus only be interpreted to state that any contribution in excess of the same would be liable to tax.

• The term ‘upto’ hardly needs to be defined and connotes an upper limit. It is interchangeable with the term ‘till’ and means that any amount till the ceiling of Rs. 7500 would exempt for the purposes of GST.