9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (8) TMI 233 - AAR - GSTEligibility for exemption under Sr. No. 41 of Notification no. 12/2017-Central Tax (rate) dated 28 June 2017 - whether 18% GST Will be applicable on the leasing services provided to M/s. Abhijit Realtors and Infraventures Pvt. Ltd.? HELD THAT - As the entity is created as Government Company established by both the Central government and State government with 50% participation in equity. Hence the applicant is covered by the term the Central Government, State Government or Union territory shall have 20 per cent, or more ownership in the entity directly . The Applicant is not eligible for exemption under Sr. No. 41 of Notification no. 12/2017-Central Tax (rate) dated 28 June 2017 - 18% GST Will be applicable on the leasing services provided to M/s. Abhijit Realtors and Infraventures Pvt. Ltd.
Issues Involved:
1. Eligibility for exemption under Sr. No. 41 of Notification No. 12/2017-Central Tax (Rate) dated 28 June 2017. 2. Applicability of 18% GST on leasing services provided to M/s. Abhijit Realtors and Infraventures Pvt. Ltd. Detailed Analysis: Issue 1: Eligibility for Exemption under Sr. No. 41 of Notification No. 12/2017-Central Tax (Rate) dated 28 June 2017 Facts and Contentions: - The Applicant, Maharashtra Metro Rail Corporation Ltd., engaged in establishing a Metro Railway System, issued a tender for licensing commercial space adjacent to Airport Metro Station, Nagpur. - The service recipient, M/s Abhijit Realtors and Infraventures Pvt. Ltd., believed that the license fees should be exempt from GST under the exemption notification. - The Applicant contended that the upfront premium is for the building and not land, and the space is not intended for industrial or financial property. Legal Interpretation: - Clause 41 of Notification No. 12/2017-Central Tax (Rate): Exempts upfront amounts for long-term leases of industrial plots or plots for infrastructure for financial business, provided certain conditions are met. - Conditions Not Met: - The leased space is for commercial use, not industrial or financial. - The area has not been declared as an industrial or financial business area by the state government. - The lease agreement does not mention that central tax shall be exempted on long-term leases. Findings: - The leased space is for commercial purposes as per the development plan of Nagpur City. - The Maharashtra Government Notification dated 14 March 2018, modified the land use to "parking, station, and commercial use." - The conditions for exemption under Sr. No. 41 are not satisfied as the space is not for industrial or financial purposes. Conclusion: - The Applicant is not eligible for exemption under Sr. No. 41 of Notification No. 12/2017-Central Tax (Rate). Issue 2: Applicability of 18% GST on Leasing Services Facts and Contentions: - The Applicant accepted the bid from M/s Abhijit Realtors and Infraventures Pvt. Ltd. for leasing commercial space. - The lease agreement specifies that GST will be levied over and above the consideration. Legal Interpretation: - Classification of Services: The services provided fall under "997212 Rental or leasing services involving own or leased non-residential property." - Notification No. 11/2017-Central Tax (Rate): Specifies a tax rate of 18% for real estate services other than those exempted. Findings: - The lease agreement and tender documents clearly state that GST is applicable on the upfront premium. - The transaction does not satisfy all the conditions for exemption under Notification No. 12/2017. Conclusion: - The leasing services provided to M/s. Abhijit Realtors and Infraventures Pvt. Ltd. are taxable at 18% GST (9% CGST & 9% SGST). Order: - Question 1: The Applicant is not eligible for exemption under Sr. No. 41 of Notification No. 12/2017-Central Tax (Rate) dated 28 June 2017. - Question 2: The leasing services provided to M/s. Abhijit Realtors and Infraventures Pvt. Ltd. are taxable at 18% GST (9% CGST & 9% SGST).
|
