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2024 (2) TMI 646 - AUTHORITY FOR ADVANCE RULING, UTTAR PRADESHScope of supply - transfer of leasehold rights in respect of Noida Authority allotted land from applicant to M/s S.K. Food Equipments Pvt. Ltd. - GST is payable on the transfer of leasehold rights in respect of the consideration of Rs. 6,60,00,000/-to be received by them from M/s S.K. Food Equipments Pvt. Ltd. for the land allotted by Noida Authority or not - Eligibility of input tax credit in the hands of M/s S.K. Food Equipments Pvt. Ltd - HELD THAT:- Scope of supply under section 7 (1) of the GST Act includes all forms of supply of goods and services, including a sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made. Section 7 (I A) read with Schedule 11 under the GST Act provides which of such supplies shall be treated as supply of goods or services. Paragraph 2 of Schedule II provides that with respect to transactions relating to land and buildings, any lease, tenancy, easement, license to occupy the land, letting out of a building including a commercial, industrial or residential complex for business or commerce is the supply of services. In the instant case, the applicant had entered into lease deed with Noida Authority for 99 years. Subsequently, the applicant has entered into agreement with M/s S.K. Food Equipments Pvt. Ltd and has transferred the lease rights with the approval of Noida Authority. The moment the lease right has been transferred from the applicant to M/s S.K. Food Equipments Pvt. Ltd, the party has provided service of transferring the leasehold rights and thus action of the applicant is very well covered under Paragraph 2 of Schedule II of CGST Act 2017. The applicant, apart from the conditional possession of the Demised Premises enjoys no title or ownership, which is central to sale of any immovable property within the meaning of section 54 of the Transfer of Property Act, 1882. The applicant's interest in the benefits arising out of the Demised Premises is limited to sub-leasing in terms of the Deed, and he is capable of transferring the benefits only to that extent. The assignment, therefore, does not amount to transfer of any benefit other than leasehold rights in terms of the Deed for the unexpired period of the lease and is no transfer of any immovable property in the context of the GST Act. The activity of assignment is in the nature of agreeing to transfer one's leasehold rights. It does not amount to further sub-leasing, as the applicant's rights as per the Deed stands extinguished. Neither does it create fresh benefit from land other than the leasehold right. It is like a compensation for agreeing to do the transfer of (he applicant's rights in favour of the assignee. It is a service classifiable under Other miscellaneous service (SAC 999792) and taxable @ 18% under SI.No. 35 of Notification No. 11/2017-CT (Rate) dated 28/06/2017.
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