9911796707
TMI Blog2024 (2) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... s including detergent cakes & powder, cleaning preparation, etc. 3. The applicant has sought advance ruling in respect of the following questions:- 1. Whether the transfer of leasehold rights in respect of Noida Authority allotted land from applicant to M/s S.K. Food Equipments Pvt. Ltd. would fall within the ambit of supply as defined under Section 7? 2. Whether the 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? 3. Eligibility of input tax credit in the hands of M/s S.K. Food Equipments Pvt. Ltd On the transfer mentioned in question No 1 above. 4. The question is about applicable GST rate under the provisions of CGST Act and liability to pay GST, hence is admissible under Section 97(2)(a) of the CGST Act 2017. Further, as per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant. 5. Statement of relevant facts having a bearing on the question(s) raised,- 1. The applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a non-observant clause, thus overriding the provisions of section 7(1). Hence, except the activities listed in Schedule III and those notified in terms of section 7(2)(b), all other activities amount to supply. 7.2 "Sale of land" is covered under Schedule III of CGST Act, 2017 and is excluded from GST levy on account of being neither supply of services nor supply of goods. Serial No. 5 to the Schedule III of CGST Act is as under:- "5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building." 9. The basic question in the instant case is whether the sale of plot after carrying out certain development activities or providing different amenities is sale of land or supply of something other than land. The term "Land" has not been defined under the GST Law and therefore, in absence of any definition in a statute, the meaning has to be construed in most relevant and popular sense. Land is generally qualified by its use or nature like agricultural, urban, rural, industrial, commercial, residential etc but in all cases it remains land. The end result of any activity of development of land does not change it from being land. In general trade parlance, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy and possession over the land for the lease period. Therefore, leasehold rights amount to a benefit arising of land. Since benefit arising of land is considered as an immovable property, leasehold rights can also be classifiable as immovable property. Assignment of leasehold rights amounts to transfer of an immovable property As per Section 3(a) of Land Acquisition Act, 1894 The expression 'land' includes benefits that arise out of land and things attached to earth or permanently fastened to anything attached to the earth" As per Section 3(4) of Bombay Land Revenue Code, 1879 'land' includes benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth and also shares in or charges on the revenue or rent of village or other defined portions of territory" 14. That the above definitions clearly provide that land would include benefits arising of land. If the leasehold rights are treated as land itself, no tax would be applicable on its assignment same would. 15. Long term lease can be considered as Sale of Land? Whether long term lease can be treated to be equivalent to sale of land has been the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terpretation of law as under- Land and Building (a) any lease, tenancy, easement, licence to occupy land is a supply of services; Sale of Land (Schedule III) Section 7(2)(a) of the CGST Act 2017 provides that certain activities or transactions provided in Schedule III would be treated neither as supply of goods nor as supply of services i.e. not a supply altogether. As per Schedule III of CGST Act, 2017, following will not considered as supply: 5. Sale of land, subject to clause (b) of paragraph 5 of Schedule II, sale of building. Sale of land would be treated neither as supply of goods nor as supply of services. Sale of freehold land and completed building is not a supply as per Schedule III of the CGST Act 2017. That Exemption Notification: Notification no. 12/2017-Central Tax (rate) dated 28th June 2017 is the mega exemption notification for services which provides for the list of all exempt supplies. Entry 41 - "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 fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ood EQUIPMENTS Pvt. Ltd. would fall within the ambit of supply as defined under Section 7? 2. Whether the 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? 3. Eligibility of input tax credit in the hands of M/S 5- K. Food Equipment's PVT LTD. On the transfer mentioned in question No 1 above. 11. We have gone through the Form GST ARA-01 filed by the applicant and observed that the applicant has ticked following issues on which advance ruling required,- (1) Admissibility of input tax credit of tax paid or deemed to have been paid. (2) Determination of the liability to pay tax on any goods or services or both. At the outset, we do not admit question no. 03 related to "Admissibility of input tax credit of tax paid or deemed to have been paid", as it is related to recipient of the service. The issue raised in the application, as question no. land 2 related to "Determination of the liability to pay tax on any goods or services or both" is squarely covered under Section 97(2) of the CGST Act 2017. We therefore, admit th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered 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. 13.4 It is evident from the above discussion that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
