TMI Blog2019 (6) TMI 1009X X X X Extracts X X X X X X X X Extracts X X X X ..... llel notifications issued under the MGST Act, 2017? HELD THAT:- CIDCO is clearly covered under the definition of Government Entity since it is constituted and established by the State Government of Maharashtra with 100% participation by way of Equity or Control to carry out the function of development of new township of New Bombay. Hence in the subject case we continue to hold that the applicant can be considered as a Government Entity - also NMMC and PMC are Municipal Corporations which satisfy the definition of a local authority as defined in Section 2 (69) of the CGST Act. As per Sr.No 2 (a) of Schedule II of the CGST Act, any lease, tenancy, easement, licence to occupy land is a supply of services . Hence, any supply which is either deemed as services under Schedule II of CGST Act or which are not covered under the definition of goods shall be categorized as pure services. However, as per the above mentioned notification, works contract services or other composite supplies involving supply of any goods are not covered in Sr. No. 3 - Since we find that the said supply is in the form of Pure Services then Sr. No, 3 of the Notification No. 12/ 2017-Central Tax (Rate) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n construction of residential complex predominantly meant for self use or use of the employees of Central Government, State Government, Union Territory, a local authority or a governmental authority is liable to GST. - GST-ARA-93/2018-19/B-39 - - - Dated:- 13-4-2019 - SHRI B. TIMOTHY, AND SHRI B.V. BORHADE, MEMBER PROCEEDINGS (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act respectively] by M/S. CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LIMITED, seeking an advance ruling in respect of following questions. (1) Whether the supply of services by the applicant, of transfer by way of lease of vacant plots of Maharashtra State Government owned lands or privately owned lands acquired under the Land Acquisition Act, 1894 by the Maharashtra State Government vested in CIDCO, to: (a) Navi Mumbai Municipal Corporation( NMMC ), f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... frastructure such as road transport, mass rapid transportation system; (iii) To provide physical and social services which would raise living standards and reduce disparities in the amenities available to different sections of the society, etc. The applicant has submitted that they would be transferring by way of lease, vacant plots of Maharashtra State Government owned lands or privately owned lands acquired under the Land Acquisition Act, 1894 by the Maharashtra State Government to : (a) Navi Mumbai Municipal Corporation ( NMMC ), for intended development thereof and construction of buildings by the latter on each of those plots, for separate use as: Indoor Recreation Centre, and, (ii) Slaughter House and to Panvel Municipal Corporation ( PMC ), for intended development thereof and construction of buildings by the latter on each of those plots, demarcated for separate use as: (i) PMC Ward Office(s), (ii) PMC Commissioner s residence, and (iii) PMC Mayor s residence. They have submitted that their proposed leasing activity, for which they would receive consideration from the allottees in the form of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to this function of NMMC. 5. The setting up of Slaughter House is covered within the scope of entry 18 of the 12 th Schedule to the Constitution of India relating to Regulation of slaughter houses and tanneries ; the implementation of such schemes of like nature being entrusted to any Municipality under Article 243W (a)(ii) of the Constitution of India, the said pure services of the applicant can be said to be an activity in relation to this function of NMMC. 6. The construction of Ward Office(s) on the plot allotted by CIDCO is covered within the scope Of Article 243W of the Constitution of India which reads thus the Legislature of a State may, by law, endow- (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government . Hence, the said pure services of CIDCO can be said to be by way of any activity in relation to and as a precursor to the functioning of PMC. 7. The construction of PMC Commissioner s residence on the plot allotted by CIDCO is covered within the scope of Article 243W of the Constitution of India which reads thus the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Slaughter House. However, remaining all services as listed below will not be covered under chapter 99 as tax free services. 1. Indoor recreation center 2. PMC ward office 3. PMC Mayor s residence 4. PC Commissioner Residence These services will be covered under Chapter 9972 liable to GST at the rate of 18 percent. 04. HEARING The Preliminary hearing in the matter was held on 20.02.2019. Sh. Mangesh Kadam, C.A., appeared and requested for admission of their application as per contentions made therein. Jurisdictional Officer Sh. R. M. Thombre, Dy. Commr. of S.T.((E-002) LTU-21, Raigad Division, Navi Mumbai appeared and made written submissions. The application was admitted and called for final hearing on 12.032019. Sh. Mangesh Kadam, C.A., appeared, made oral and written submissions. Jurisdictional Officer, Sh. R. M. Thombre, Dy. Commr. of S.T.((E-002) LTU-21, Raigad Division, Navi Mumbai appeared and requested for time period of upto days to make written submissions. We heard both the sides. 05. OBSERVATIONS We have gone through the facts of the case, wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly of goods or supply of service, we have to refer Schedule II of the CGST Act, 2017. As per Para No.2(a) of Schedule Il of CGST Act,2017 any lease, tenancy, easement, license to occupy land is a supply of services. The leasing of plots in the subject case will therefore be a supply of services only. The applicant has submitted that the subject lease transaction undertaken by them would be in the form of pure services . We find that the term pure services is not defined under GST Laws. However the very term pure services would mean that these services would not have an element of supply of immovable goods, movable goods or/ and both. In the subject case we find that the applicant is only going to lease out the lands to the Municipal Corporations and there is no element of goods involved in the subject transaction. Hence we have no hesitation in considering the subject services as pure services . Notification No. 12/2017- Central Tax (Rate) dated 28 June 2017, notifies the services which are exempted from levy of GST. Serial no. 3 of exemption notification provides that: Pure Services (excluding works contract service or other composite supplie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in relation to any function entrusted to a Municipality under article 243W of the Constitution. In the subject case the supply is to a Municipality and therefore we reproduce Article 243W of the Constitution which is as under:- 243W. Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow- (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to- (i) the preparation of plans for economic development and social justice; (ii) the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule; (b) the Committees with such powers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule. The TWELFTH SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Municipality under Article 243W of the Constitution and would be exempt as per Sr. No. 3 of Notification No. 12/2017-CentraI Tax (Rate) 28.06.2017 mentioned above. LEASE OF PLOTS TO NMMC FOR SLAUGHTER HOUSE Sr. No 18 of the 12 th Schedule under Article 243W is with respect to Regulation of Slaughter Houses and Tanneries Hence plots leased by the applicant (a kind of pure services), to a Municipality i.e. a local authority for setting up Slaughter Houses can be perceived to be in relation to a function entrusted to such Municipality under Article 243W of the Constitution ( Regulation of Slaughter Houses and Tanneries ) and would be exempt as per Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 mentioned above. LEASE OF PLOTS TO PMC FOR PMC WARD OFFICE. PMC is a Municipal Corporation, a local authority. Article 243 W of the Constitution of India has endowed Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government with respect to- (i) the preparation of plans for economic development and social justice; (ii) the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter 99 All Services 2 Section 5 Construction Services 3 Heading 9954 (Construction services) (i) ..) 9 - (ii) .. 9 - (iii) . 6 - (iv) . 6 (v) .. 6 (vi) composite supply of works contract as defined in clause 119 of section 2 of Central Goods and Services Tax Act, 2017 provided to the Central Government, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 Heading 9972 (i) Services by the Central Government, State Government, Union Territory of local authority to governmental authority or government entity, by way of lease of land. Nil - (ii) . Nil - (iii) Real Estate Services Other that (i) and (ii) above 9 . In view of Sr.3 clause (vi) (c) and Sr. No. 16, lease of plots for such constructions to be carried out, as in the subject case, will not be exempt and will be covered under Chapter 9972. 06. In view of the extensive deliberations as held hereinabove, we pass an order as follows : ORDER (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA-93/2018-19/B-39 Mumbai, dt. 13-04-2019 For reasons as discussed in the body of the order, the questions are answered t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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