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TMI Blog2022 (1) TMI 1300X X X X Extracts X X X X X X X X Extracts X X X X ..... rs that the activity of the appellant is absolute sale/ lease of land. The RSCCL are realizing only the price of land/ lease amount from the buyer/ lessee and the development cost of 647.30 Acres of land is borne by the Government. The development of individual plots by way of obtaining water/ drainage/ power connection or construction and maintenance of any road or electric installation etc. is the responsibility of the buyer. The sale of land is neither supply of goods nor supply of service as per Serial No. 5 to the Schedule III of CGST Act. The applicant are not liable to pay tax on the amount received by them against allotment of land on free hold basis for the entire consideration amount of sale deed/ e-auction bidding amount. Financial Business Area in not been defined in the statute. However, in common parlance, Financial Business Area or Financial District or Central Business District is often the commercial and business centre of a city, having a number of financial firms. The Government of Jharkhand, in association with Government of India, is developing Smart City with the concept of having Industrial Zones, Commercial Zones, Residential Zones, Public/ Semi-public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th focus mainly on excellence in education in ABD Location of 656.30 Acres along with provision of basic amenities like drinking water, sanitation, and solid waste management in a much smarter way to address the challenges of urban infrastructure issues posed by Ranchi's rapidly growing urban population. This 656.30 Acres of land which is a Greenfield Based development will adopt a transit-oriented development (TOD) approach with dense, mixed-use neighbor hoods planned along frequent, fast and reliable high capacity mass transport lines. The applicant have purchased 647.08 Acres of land in capital city of Jharkhand from Heavy Engineering Corporation Ltd. (HEC) and has framed the rules and regulations for plot-wise allotment of purchased land for development of the area and to transform it into a sustainable, equitable and inclusive smart city. 3. The applicant have sought for Advance Ruling in respect of the following questions:- (i) Applicability of GST on transfer of Leasehold land which includes other services such as Electricity Line, Water Line, Drainage Line, Road, Sewerage Line etc. like in case of plotted development. (ii) Applicability of GST on transfer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority or a board or any other body including a society,- (i) Set up by an Act of Parliament or a State Legislature, or (ii) Established by any Government, With 90% or more participants by way of equity or control, to carry out any function entrusted by the Central Government, State Government, Union Territory or a Local Authority. Hence, there is no doubt that RSCCL falls within the purview of Government Entity . 7. Now, before going into the questions raised by the applicant, it is pertinent to discuss the taxability of land under GST Laws. 7.1 Supply is defined under section 7 of the GST Law:. Section 7(1) contains an inclusive list of what constitutes a supply, while section 7(2) has listed out what does not constitute supply. Further, section 7(2) begins with a non obstante clause, thus overriding the provisions of section 7(1). Hence, except the activities listed in Schedule III and those notified in terms of section 7(2)(b), all other activities amount to supply. 7.2 Sale of land is covered under Schedule III of CGST Act, 2017 and is excluded from GST levy on account of being neither supply of services nor supply of goods. Serial No. 5 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ested with Ranchi Municipal Corporation, assigned to them by Government of Jharkhand. The Central Government and Jharkhand Government have provided grants to RSCCL for Area Based Development of land. The title in the common area and amenities does not belong to the buyer but rests with RSCCL, a Government body. Further, as per the proposed sale/ lease deed, submitted by the applicant, the buyer/ lessee shall obtain water, drainage and power connection by making application to the respective authorities. The buyer shall be responsible for construction and maintenance of any road or drainage or any electric installation within the allotted plot at his own cost and expenses. 8.5 From the above, it appears that the activity of the appellant is absolute sale/ lease of land. The RSCCL are realizing only the price of land/ lease amount from the buyer/ lessee and the development cost of 647.30 Acres of land is borne by the Government. The development of individual plots by way of obtaining water/ drainage/ power connection or construction and maintenance of any road or electric installation etc. is the responsibility of the buyer. The sale of land is neither supply of goods nor supply o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having Industrial Zones, Commercial Zones, Residential Zones, Public/ Semi-public Zones and Mixed Use Zones. The applicant have submitted that various financial firms like Banks, Insurance Companies, Trading Houses etc. are investing for the purpose of having their branch offices there. As such, the Area Based Developed property of 647.30 Acres appears to be a Financial Business Area. Hence, the leasing of industrial plots or plots for development of infrastructure for financial business by RSCCL, a Government entity, to the industrial units or the developers in this Area Based Developed property for commercial/ mixed use is exempted from the tax. In cases other than that, the applicable rate of Goods Services Tax in case of leasing services is 18%. 10. In light of the foregoing, we rule as under:- RULING Q.1: Applicability of GST on transfer of leasehold land which includes other services such as Electricity Line. Water Line. Drainage Line. Road. Sewerage Line etc. like in case of plotted development. Ans : As discussed in forging paras, the leasing of property by RSCCL, if covered under the provisions of Notification No. 12/2017-Central Tax (R) dated 28.06.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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