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TMI Blog2021 (12) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... under the MPGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or MP GST Act would be mentioned as being under the GST Act. BRIEF FACTS OF THE CASE AND SUBMISSION OF THE APPLICANTS IN THEIR APPLICATION IS AS UNDER - 3.1. The Applicant is a Public Sector Undertaking. The company is jointly owned by the Government of MP and is equally managed by Madhya Pradesh Urban Development Company Limited (MPUDCL) and Bhopal Municipal Corporation (BMC). The sole objective of Applicant is Planning and implementing the "Smart City Project" in Bhopal. 3.2. Smart City Bhopal Mission and values: The smart city mission of the Government of India seeks to address the issue of urbanization through the transformation of selected cities. The intent is to create sustainable cities that can provide a good quality life to its citizens. Bhopal has been amongst the 20 lighthouse cities with a dramatically different approach which is driven by 'Redevelopment' rather than 'Retrofitting'. 3.3 in pursuance to LAND MONETIZATION SCHEME of Smart City Mission, A RFP for Allotment of Plot on freehold basis for ABD {Area Based Development) Pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be provided by the applicant in respect of said Plot. 3.7 Execution of Allotment Letter (Please 8 of RFP at Page 26) "8.1 The Allotment letter [as per the RFP Part-III] will be issued to the Allottee, after the Selected Bidder has fully complied with the terms of LolD. The Selected Bidder will be referred to as an Allottee in the Allotment letter, after BSCDCL has received the payment of First Instalment of the Sale Price, amounting to 25% (Twenty Five percent] of the sale Price within 60 (Sixty) days from the date of issuance of LolD. 8.2 Please take note that the issuance of Allotment letter does not grants or vests any ownership rights and/ or possession rights over the Plot in favour of the Allottee any manner whatsoever, and BSCDCL shall continue to have complete ownership and possession of Plot /property till entire Sale Price/ sale consideration has been paid by the Allottee to BSCDCL and a Deed of Conveyance has been executed in favour of the Allottee." 3.8 Execution of Deed of Conveyance :(Please refer 10.1 of RFP at Page 27),- "10.1 Any time after the payment of the full Sale Price (including the applicable interest, if any) as per the terms of the Allotment lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bhopal Smart City Development Corporation limited and any other applicable law with respect to Area Based Development (ABD) area/ the Plot, and further, the Buyer shall also fully abide by the applicable Development Plan with respect to the Plot." 3.10 The Applicant will carry out the development activities on the said plot of kind and also in the ABD area. The development activities include 24X7 water supply and power, underground utility corridor, ICT infrastructure, smart street lighting, automated solid waste system. Apart from this, Applicant will develop and maintain other infrastructure such as 45 m Wide Road (Boulevard Street). 3.11 As per REP, Consideration/Sale Price has been fixed for lumpsum basis i.e. Consolidated price for Developed Plot has been fixed. That is, no segregation into Value of Land and value of development facilities/utilities whether relating to Plotor common facilities in the Area has been made. 3.12 The Allottee (Successful Bidder), after complying with the terms and condition of the REP, Allotment Letter, LOID and Conveyance deed may carry out the remaining construction activities such as civil foundation and construction of structure thereon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Krishnan, CA on behalf of Applicant and Shri Atul Shrivastava, Dy. Commissioner, SGST Circle-1, Bhopal, Jurisdictional officer appeared virtually for personal hearing and Shri Krishnan reiterated the submissions already made in the application. Later on applicant also provided the letter issued by NagriyaVikasEvemAvasVibhag M.P by which the land which was transfer by the department to Bhopal Smart City Corporation Limited. The applicant also gave the detail of how the land costing was to be done by the Corporation. Later on the applicant also sent a letter stating that the provision relating to obtaining the completion certificate is not applicable in respect of the project being executed by the applicant, in support of his statement the applicant also included a photocopy of letter dated 03-11-2001 issued by the Municipal Corporation Bhopal to the applicant in which the corporation has stated that the completion certificate is issued under the provisions of Madhya Pradesh Nagar PalikaAdhiniyam, 1956 only in respect of such building in respect of which building permission has been issued lo the said building by the building permission department of the Municipal Corporation. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered before supply or under a contract of supply ; 7.4.2 The definition of Service given in Section 2(102) however seems to include land in its purview in so far as it states that services means anything other than goods. The relevant text is as under:- (102) "services" means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination. to another form, currency or denomination for which a separate consideration is charged; 7.4.3 This interpretation of supply of land being a supply of service seems grossly absurd and should have been hit by the Rule of Absurdity, but by virtue of Entry No. 5 in Schedule III. this absurdity seems to have been prevented. Entry No. 5 states as under:- 5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building. Thus, Sale of Land has been treated to be neither a supply of service nor a supply of goods. 7.4.4 The law has recognized that there may be instances of sale of land as part and parcel of a transaction, which is exigible to GST. Thus, while arriving at the value of construction se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work does not get transferred to the buyer of the plot of land. The development work is a common amenity, which is to be enjoyed b\ people at large who own the adjacent parcel of land as well as all such persons who have a right of way. Thus, in this case, the subject matter of sale is the land only and not the development work done. 7.5.6. Hon'ble Karnataka Appellate Tribunal in the case of Continental Builders and Developers v. State of Karnataka, 2009 (67) Kar. L. J 359 (Tri) (FB) examined the issue whether development of plots and sale, is works contract or not under Karnataka Sales Tax Act, 1957. The Tribunal had held that, "Civic amenities work done by land developer, there is no transfer of property in goods to the site purchasers either collectively or individually." 7.5.7. The development work done on the land is for the whole parcel of land and not for a given plot, which is sold to the customers. The title in the common area and amenities does not belong to the owners of the plot but rests with the Urban Local Body as per the applicable laws. Further, there are easement rights and right of way to be granted, which further show that there is no collective ownership of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opular sense. 7.7.1 Land may be qualified by its use or nature like agricultural, fallow, urban, rural, industrial, commercial or residential, but it remains land. The end result of the activity of development of land does not result in a Building or Complex. In the Trade Parlance developed land is also known as land. 7.7.2 It is no more res integra that words used in taxing statutes in respect of items should be interpreted in the way in which it is understood by people conversant with the subject matter of the statute, unless statute prescribes a specific definition. Scientific and technical meaning should not be applied but popular meaning should be applied as legislature does not suppose the merchants to be geologists, botanists or naturalists. - CCE v. Krishna Carbon Paper Co. 1988 taxmann.com 620 7.8 The question raised by the applicant is qualified by the phrase "issuance of completion certificate". In this regard, we have to say that from the discussion above, it is clear that development of land is not akin to construction of a complex or building. The concept of obtaining a completion certificate is applicable to the construction of a complex or building and not to dev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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