TMI Blog2019 (7) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Form GST ARA - 01 and also submitted the copy of Challan evidencing payment of application fees of ₹ 5,000/-each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2. The Applicant has stated that is not rendering any services to any outsider nor is a registered dealer. The Applicant has entered into a Profit Sharing Agreement (hereinafter referred to as PSA) on 25th day of May 2017 in which the applicant will get a profit for a strategic sale of equity shares over and above a specified sale price per equity share by a set of shareholders of SHA. The value of shares has increased since and a strategic sale is imminent. The applicant states that the arrangement of profit sharing is by virtue of his empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd August 2006 along with the terms and conditions attached to the appointment which is for a period of 5 years from 17.06.2005. The IRDAI has approved his appointment as CMD. His contract of employment for appointing / re-appointing to serve as a CMD for SHA is duly made through and approved by the Board of Directors of SHA. All the appointment/re-appointments are presented by the Board to IRDAI for its approval and are approved by IRDAI as per Section 34A of the Insurance Act, 1938 all emoluments payable to a Chairman cum Managing Director is required to be submitted for IRDAI's notice/ approval. His current appointment is till 17.06.2020. In 2007, sweat equity shares were allotted to him with the approval of IRDA. 4.2 By vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , other than lottery, betting and gambling. Therefore, 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. 7. In view of the above, we rule as under: RULING The Profit Sharing Agreement between the applicant ad variou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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