9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (3) TMI 44 - AAR - GSTMaintainability of Advance Ruling application - completed transaction - Supply or not - subsequent transfer of State Industries Promotion Corporation of Tamil Nadu Limited s (SIPCOT) allotted lease hold rights in the land from the Applicant to M/s. Kanta Flex (India) Private Limited - applicable HSN/SAC code and GST Rate - HELD THAT - As the financial transactions relating to the instant issue, have been carried out in its entirety by 07.05.2022, i.e., the date of last payment, any liability arising out of the taxability or otherwise, on the instant transaction, ought to have been discharged at the relevant point of time by the applicant. Advance Ruling as the name suggests, are rulings pronounced upfront aimed at facilitating the trade on issues of ambiguous nature. The queries raised by the applicant relating to taxability and classification, if any, involved on the issue in question, need not be answered, inasmuch as the transaction stands completed already, before the filing of application by the applicant. The applicant cannot seek an advance ruling on a completed transaction as laid down in Section 95(a) of the CGST Act, 2017, and accordingly, this authority refrains from giving any ruling in this regard.
Issues Involved:
1. Whether the subsequent transfer of SIPCOT's allotted leasehold rights in the land constitutes a 'Supply' under Section 7 of the Goods and Services Act, 2017. 2. If yes, what will be the HSN/SAC code and GST Rate? Summary: Issue 1: Whether the transfer constitutes a 'Supply' under Section 7 of the Goods and Services Act, 2017 The applicant, a GST registrant, sought an advance ruling on whether the transfer of leasehold rights in land from the applicant to M/s. Kanta Flex (India) Private Limited falls within the ambit of 'Supply' as defined under Section 7 of the CGST Act, 2017. The applicant argued that the transaction should be considered a sale of land, falling under Entry No. 5 of Schedule III of the CGST Act, 2017, which deals with 'Activities or Transactions which shall be treated neither as a supply of goods nor a supply of services'. The applicant relied on precedents such as the case of Commissioner of Income Tax Vs. M/s. Rane Brake Lining Ltd., where the Hon'ble Madras High Court held that a lumpsum amount paid does not make a permanent lease any less an alienation than a sale. Issue 2: HSN/SAC code and GST Rate The concerned 'CENTER' authority stated that the transaction is not the transfer of leasehold rights of land as claimed by the applicant, but rather the transfer of interest, i.e., agreeing to part with the interest on the leasehold land held by the applicant to the buyer on receipt of consideration. The activity undertaken by the applicant for which a consideration of Rs. 1.24 crores was received is an activity of "agreeing to do an act", taxable under "Other Miscellaneous Services" with SAC 9997. The 'STATE' authority did not furnish any reply, implying no pending proceedings on the issue raised by the applicant. Discussion and Analysis The Authority for Advance Ruling (AAR) noted that the financial transactions relating to the issue were completed before the filing of the application. The Memorandum of Understanding between the applicant and M/s. Kanta Flex was dated 19.09.2021, SIPCOT's approval for the transfer was dated 30.03.2022, and the final payment was made by 07.05.2022. The AAR emphasized that 'Advance Ruling' is intended for issues of ambiguous nature that are to be undertaken or proposed to be undertaken by the applicant, as per Section 95(a) of the CGST Act, 2017. Ruling The Authority concluded that the applicant cannot seek an advance ruling on a completed transaction, as laid down in Section 95(a) of the CGST Act, 2017. Therefore, the authority refrains from giving any ruling on the taxability and classification of the completed transaction.
|
