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TMI Blog2022 (12) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT FACTS: The submissions made by M/s United Breweries Limited, the Applicant, are as under:- 2.1 The Applicant, engaged in the manufacture of Beer & bottled drinking water had a lease hold land measuring 24.300 Sq. mtrs., which was leased out to them by the Maharashtra Industrial Development Corporation (MIDC). The applicant was holding this long term leased property, after obtaining necessary approvals, permissions, Commencement certificate from MIDC/NMMC and concerned Authorities, have constructed Industrial structures thereon as per the approved building Plans. The applicant had also obtained building Completion Certificate from MIDC. 2.2 The applicant has executed an agreement dated 24.12.2020 known as "Deed of Assignment Cum Transfer" by virtue of which applicant have agreed to transfer its rights over the land & struct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to transfer of a right to enjoy immovable property. 2.10 It can be seen from the definition of immovable property as per Section 3(26) of General Clauses Art, 1897, the phrase 'benefits to arise out of land' is relevant to the instant case. Benefits arise out of land is nothing but the interest in land. 2.11 The applicant submits that lease simplicitor alone should attract levy of GST. Assignment of leasehold rights on land, on the other hand, is nothing but the transfer of immovable property akin to the sale of land and buildings and no GST is leviable on such assignments. 2.12 'Sale' means the transfer of property or title for a price. Assignment of the leasehold rights effectively transfers possession, title and interest to the assignee for a price. It is nothing but akin to sale of immovable property and out of the purview of GST. 2.13 It is further submitted that the very nature of service excludes circumstances in which title is transferred in a thing (movable or immovable). Hence, assignment can never be construed as service unless it is expressly deemed to be so in the statue for the purposes of taxation, subject, of course, to the validity of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20 Not. No. 12/2017-CT as amended from time to time, provides as under: 41 Heading 9972 (Upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable in respect of service by way of granting of long term lease of thirty years, or more) of industrial plots or plots for development of infrastructure for financial business, provided by the State Government Industrial Development Corporations or Undertakings or by any other entity having [20] per cent. or more ownership of Central Government, State Government, Union territory to the industrial units or the developers in any industrial or financial business area. Nil --- 2.21 It may be noted that to avail the exemption following conditions need to be satisfied: SR Condition Remarks 1 Amount payable should be in respect of service by way of granting of long term lease of thirty years, or more) Yes, its for more than 30 years 2 It should be, inter-cilia, for industrial plots provided by the State Government, Industrial Development Corporations etc Yes, its industrial plot provided by Maharashtra Industrial Development Corporation (MIDC) 2.22 As the conditions are satisfied, app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice of the lease for the unexpired period after obtaining prior approval of the MIDC on payment of the transfer fee. 3.3 From the facts of the case, it is evident that MIDC who owns the land has leased the allocated land to applicant for a period of 99 years, who, by virtue of the lease conditions, does not possess the right to sub-let any part or whole of the property leased to them. However, the applicant may transfer the leasehold rights to any other person with the approval of MIDC. Thus, it is clear that the applicant holds the leasehold rights which he may agree to transfer to any other person but the applicant cannot transfer the leasehold rights to such person on his own. The only option that exists for the applicant is to request MIDC to approve such an agreement entered into by the applicant with the other person and request MIDC to approve and execute the modified deed of the lease for the remaining period. Accordingly, Applicant had agreed to transfer leasehold rights held by them in respect of the land to GREENSCAPE IT PARK LLP (GREENSCAPE), for consideration and MIDC has approved the request and stipulated the payment of the differential cost of land & processing fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 3.5 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 stand extinguished. Neither does it create fresh to benefit from land other than the leasehold right. It is like compensation for agreeing to do the transfer of the applicant's rights in favour of the assignee. It is a service classifiable under "Other miscellaneous service" (SAC 999792) and taxable @ 18% under Sl. No. 35 of Notification No. 11/2017-CTR dt 28/05/2017, as amended from time to time. 3.7 Further, the question that, Whether assignment/transfer of leasehold rights in land & structures standing thereon by the applicant would qualify as 'supply and liable to GST and if so, then under which section of GST Act has already been decided by the West Bengal Authority for Advance Ruling in case of M/s. ENFIELD APPARELS LTD. In this case, the applicant, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reon) for an agreed consideration of Rs. 72, 90, 00,000/-. 5.3 During the course of the Final Hearing, the applicant stated that the consideration amount of Rs. 72,90,00,000/- was received by them prior to the date of filing of this application. On the question of maintainability of the application, the applicant has submitted that the subject application is maintainable because it is in respect of an activity which is being undertaken and the instant activity is an ongoing supply, as the amount collected, although one time, is towards long-lease of more than 30 years. 5.4 Since the applicant has submitted that the impugned supply of service is ongoing and has not been completed, we refer to Section 13 of the CGST Act, 2017 which deals with the 'time of supply of service'. 13. Time of Supply of Services. - (1) The liability to pay tax on services shall arise at the time of supply, as determined in accordance with the provisions of this section. (2) The time of supply of services shall be the earliest of the following dates, namely:- (a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under section 31 or the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpleted prior to the date of filing of the subject application. 5.6 We now reproduce relevant clause (a) of Section 95 of the CGST Act defines 'advance ruling' which is as under:- (a) "Advance ruling" means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant 5.7 As per Section 95 a there are two conditions to be fulfilled for making an advance ruling application: firstly, the question asked should be in relation to supply undertaken by the applicant and secondly the question should be in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. 5.8 We find that in the subject case, the first condition mentioned above is satisfied in as much as it is the applicant who has provided the impugned services. 5.9 Further, with respect to the second condition for the supply `to be undertaken or proposed to be undertaken' we observe that the applicant has executed the s ..... 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