2024 (2) TMI 707 - AAR - GST

Taxability - activity relating to Sale of leasehold land and also to obtain permission for such sale - scope of service recipient - HELD THAT - The activities of the taxpayer being a recipient, are not related to the supply being undertaken or proposed to be undertaken by him. Further, reference needs to be made to section 103 of CGST Act, 2017 which provides for applicability of the advance ruling. Clause (a) of sub-section (l) of the said section clearly provides that the advance ruling is binding only upon the applicant. After examining the AAR application dated 16.03.2023 (Received in office on 03.07.2023) of Applicant M/s. S.K. Food Equipment's Private Limited that it is receiver of the Goods/Services provided by the M/s. Fena Private Limited. Therefore, it falls under category of Service recipient. In light of point provided under Section 95 of CGST Act 2017, only supplier of the services/Goods can file Application for Advance Ruling. Accordingly, the application for consideration/ruling on merits is not admitted as applicant does not fall under the definition of supplier under Advance Ruling and cannot get the Advance Ruling under the Act.

Summary

Issues:
The judgment involves the issue of whether the activity relating to the sale of leasehold land and obtaining permission for such sale would be taxable under the GST provisions.

Comprehensive Details:
The applicant, a registered assessee under GST, sought an advance ruling on the taxability of the sale of an industrial plot originally allotted by Noida Authority under a 99-year lease deed. The applicant's interpretation of the law highlighted the distinction between leasehold and freehold property, emphasizing that the sale of land is not within the ambit of GST. They also referenced the Income Tax Act, stating that long-term lease of land constitutes a 'deemed sale,' which should not be subject to GST. Additionally, they mentioned an exemption under notification No. 12/17-Central Tax (Rate) that exempts leasing of industrial plots for thirty years or more from GST.

The Authority for Advance Ruling, Uttar Pradesh, examined the application and found that the applicant, being a receiver of goods/services, fell under the category of service recipient, not a supplier. As per the provisions of the CGST Act, only suppliers of goods/services can seek an advance ruling. Therefore, the application was not admitted for consideration on its merits, and no ruling was given in the matter.

The ruling stated that it was valid only within the jurisdiction of the Authority for Advance Ruling, Uttar Pradesh, and subject to the provisions of the CGST Act until declared void under Section 104(1) of the Act.