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2019 (7) TMI 1000 - AAR - GSTLiability of GST - Profit Sharing Agreement between the applicant as an employee and the shareholders - actionable claims - scope of supply - HELD THAT:- In this case, the profit sharing agreement gives the applicant a claim to the beneficial interest in the profits on the event of a strategic sale where at least 51% of paid up Equity share capital of the company is sold at a price not less than ₹ 75 or an initial public offering where the mid point of the price band as per red-herring prospeectus is not less than ₹ 75 per equity share and subsequent listing on the stock exchange - either of these events may occur or both may not, in that case, the claim is only contingent. This transaction between the applicant and the shareholders is an 'actionable claim' u/s 2(1) of CGST read with section 3 of the Transfer of Property Act, 1882. The actionable claims other than lottery, betting, gambling are activities or transactions which shall be treated neither as a supply of goods nor a supply of services and hence do not attract GST as per CGST or SGST Act - the profit sharing agreement between the applicant and various shareholders of SHA is an actionable claim and is not relating to lottery, betting and gambling and hence is covered under schedule III to CGST Act and SGST Act as neither a supply of goods nor a supply of services and hence is not taxable to CGST or SGST.
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