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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 ..... whether in the given facts of the case, the supply is of something other than land. It is pertinent to note that the moot question here is whether there is sale of anything other than land since the query stales that the plot has been sold after carrying out the development activities or providing amenities such as Drainage line, water line, electricity line, land levelling, and common facilities viz road and street light etc. 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 the common amenities with the plot owners or any association of such plot owners - the provision of common amenities such as Drainage line, water line, electricity line, land levelling, and common facilities viz road and street light etc to the buyers of the plot of land does not have any bearing on the taxability or otherwise of the sale of plot after carryi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Applicant ), is a company incorporated under the Companies Act, 2013 with registrar of Companies, Gwalior and with sole objective of Planning and implementing the Smart City Project in Bhopal. It is registered with the GST Authorities in the State of Madhya Pradesh and has been granted Registration No 23AAGCB6537N1ZE. 2. The provisions of the CGST Act and MPGST Act are identical, except for certain provisions. Therefore, unless a specific mention of the dissimilar provision is made, a reference to the CGST Act would also mean a reference to the same provision 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crores the ABD area has been envisaged to develop with state-of-the-art infrastructure with all the smart features and green technology as per the smart city guidelines. These infrastructures will include 24x7 water supply and power, underground utility corridor, ICT infrastructure, smart street lighting, automated solid waste system, to name a few. 80 % of the buildings in the area will be green rated. An integrated command and control centre will monitor and manage the ABD area as well as entire city. The Schedule-II at Page 68 of RFP provides the details of PROJECT UTILITIES which is to 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 All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id Plot unless the entire Sale Price along with the interest accrued if any, has been paid to BSCDCL, the Selected Bidder/ Allottee shall not have any rights to undertake or commence any construction/ development activities on the said Plot and or portray that the Selected Bidder/ Allottee is the owner of the said Plot. 9.2 : Upon execution of the Deed of Conveyance and handover of possession of said Plot by BSCDCL to the Buyer, the Buyer shall fully abide by all the norms with respect to building regulations and permissions (as amended from to time) as per MP Bhumi ViKasNiyam, 2012, Development Control Regulations (DCR) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd as per Government Guidelines) represented by value of Development carried out by applicant can be treated as taxable value of supply? if Yes, What will be the Taxable value and what will be rate of GST on such Taxable value? VI) If answer to the Question No V is negative and answer to the Question No. I is decided as supply of goods or services or both, whether the benefit of Para-Z of Notification No 11/2017 dated 28-06-2017 regarding l/3rd abatement/exclusion on account of the value of transfer of land or undivided share of land from the total amount charged is available to the applicant? 5. DEPARTMENT S VIEW POINT- 6. RECORD OF PERSONAL HEARING- Mr. S. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and those notified in terms of Section 7(2)(b), all other activities amount to supply, 7.3.3 Entry No 5 in Schedule III 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, per se, is out of the purview of GST on account of it not being a supply. 7.4 Apparent intention of legislature: 7.4.1 Section 2(52) which defines Goods excludes Land from its purview by stating that goods means movable property. The definition is as under:- (52) goods means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and another. 7.5.3. Sale of Land is governed by the Transfer of Property Act. 1882 and Section 54 of the said act states as under: 54. Sale is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. 7.5.4. Further, In CIT v. Motors and General Stores (P.) Ltd. - (1967) 66 ITR 692 it was held that sale is a transfer of ownership in immovable property for a money consideration. Therefore, transfer of ownership is the essence of sale. 7.5.5. It has been stated in the question that the sale of the plot is after carrying out the development activities or providing amenities such as Drainage line, water line, electricity line, land levelling, and common facilities viz road and street light etc. This development 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 Bui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f land, and things attached to the earth or permanently fastened to anything attached to the earth; As per Madhya Pradesh Land Revenue Code, 1959 - 2(k) land means a portion of the earth s surface whether or not under water; and, where land is referred to in this Code, it shall be deemed to include all things attached to or permanently fastened to any thing attached to such land; 7.6.3 From the above definitions, it is clear that the developmental work on the plot of land being sold is subsumed in land itself and ceases to have a separate identity. It cannot be bought and sold as something distinct and separate from the plot of land. 7.7 The term Land has not been defined under the GST Laws and therefore, in the absence of a definition in a statue, the meaning of land has to be construed in its popular 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 use ..... X X X X Extracts X X X X X X X X Extracts X X X X
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