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2018 (11) TMI 1412 - HC - GSTLevy of GST - premimum for leasing out of the plot allotted to the petitioner for the purposes of hospital, nursing home, diagnostic centeres etc. - The Authority for Advance Ruling, U.P. vide order dated 6.6.2018 ruled that GST is not applicable and the upfront amount on the lease as mentioned at serial no.41 of the notification no. 12 of 2017 as amended by notification no. 32 of 2017 is exempt. Held that - Even though the aforesaid Advance Ruling is final and conclusive, respondent no. 3 has issued notice dated 24.8.2018 for payment of GST on the premimum for leasing out of the plot allotted to the petitioner for the purposes of hospital, nursing home, diagnostic centeres etc. Sri Aditya Bhushan Singhal, learned counsel appearing for respondent no. 3 Sri C.B. Tripathi, Special counsel appearing for respondent 3 as well as learned counsel for Union of India and the learned Standing counsel for the State of U.P., all are directed to file counter affidavit within a month. Two weeks thereafter are allowed to the petitioner to file rejoinder affidavit.
Issues:
Applicability of GST on premium paid for lease of property under Section 7 read with Schedule II of the GST Act. Interpretation of notifications exempting service tax on one-time upfront amount for long-term lease of industrial and other plots. Advance Ruling on GST applicability for long-term lease of plots catering to public healthcare. Challenge to Advance Ruling by demanding GST on premium for leasing out land for healthcare purposes. Analysis: The judgment addresses the issue of GST applicability on the premium paid for the lease of property, guided by Section 7 read with Schedule II of the GST Act. It highlights the significance of notifications, specifically no. 12 of 2017 and 32 of 2017, which exempt service tax on one-time upfront amounts for long-term leases of industrial and other plots. The case involves respondent no. 3, the Yamuna Expressway Industrial Authority, seeking an Advance Ruling on whether GST is applicable to upfront amounts for long-term leases exceeding 30 years for plots serving public healthcare facilities like hospitals, nursing homes, and diagnostic centers. The Authority for Advance Ruling, U.P., through an order dated 6.6.2018, concluded that GST is not applicable on the mentioned upfront amounts for leases, as per the notifications. Despite this ruling being final and conclusive, respondent no. 3 issued a notice on 24.8.2018 demanding GST on the premium for leasing out a plot designated for healthcare purposes. In response, the Court directed the counsels for respondent no. 3, the Union of India, and the State of U.P. to submit counter affidavits within a month, with the petitioner allowed two weeks to file a rejoinder affidavit. The case is listed for admission/final disposal after this period. The Court, until further orders, upheld the Advance Ruling exempting GST on the premium for leasing land allocated for healthcare facilities. This interim measure prevents the demand for GST from the petitioner based on the Advance Ruling issued by the Authority for Advance Ruling U.P. on 6.6.2018. The judgment ensures adherence to the legal framework and notifications governing GST applicability on long-term lease premiums, particularly in the context of public healthcare infrastructure.
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