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TMI Blog2024 (1) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... und not to be covered under entry 41 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 and therefore cannot be treated as an exempt supply. - DR TANISHA DUTTA, AND JOYJIT BANIK, MEMBER Applicant s Representative Heard : Mr. Ankit Kanodia, Authorized Advocate PREAMBLE A person within the ambit of Section 100 (1) of the Central Goods and Services Tax Act, 2017 or West Bengal Goods and Services Tax Act, 2017 (hereinafter collectively called the GST Act ), if aggrieved by this Ruling, may appeal against it before the West Bengal Appellate Authority for Advance Ruling, constituted under Section 99 of the West Bengal Goods and Services Tax Act, 2017, within a period of thirty days from the date of communication of this Ruling, or within such further time as mentioned in the proviso to Section 100 (2) of the GST Act. Every such appeal shall be filed in accordance with Section 100 (3) of the GST Act and the Rules prescribed thereunder, and the Regulations prescribed by the West Bengal Authority for Advance Ruling Regulations, 2018. 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licant is the recipient of services. The applicant was allowed an opportunity of hearing in this regard and thereafter the AAR vide order dated 09.02.20123, rejected the application. 1.7 The applicant filed writ petition before the Hon ble Calcutta High Court challenging the said rejection order of the WBAAR. The Hon ble Calcutta High Court vide order dated 05.04.2023 allowed the applicant to file appeal before the appellate authority against the aforesaid order. 1.8 The applicant filed appeal before the Hon ble Division Bench at Calcutta High Court. The Hon ble Division Bench of Calcutta High Court vide order dated 21.04.2023 set aside the ruling of the WBAAR with direction to the authority to decide the application on merits and in accordance with law. In compliance with the order of the Hon ble Division Bench of Calcutta High Court, the applicant is heard by the WBAAR. Submission of the applicant 2.1 The applicant submits that the services provided by SMPK to him for leasing of an industrial plot of land at Taratala Road for a period of thirty years (30 years) for setting up commercial office complex against upfront lease premium is exempted from payment of tax v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uyers or owners hall incorporate in the terms and conditions, the fact that the central tax was exempted on the long term lease of the plots by the original lessor to the original lessee subject to above condition and that the parties to the said agreements undertake to comply with the same. 2.2 The applicant submits that to qualify for exemption under the aforesaid entry, following conditions need to be be satisfied- I. Firstly, lease period should be of thirty years or more. II. Secondly, the property leased should be an Industrial plot or plots for development of infrastructure for financial business. III. Thirdly, service provider must be a state Government Industrial Development Corporations or Undertakings or by any other entity having 20 per cent. or more ownership of Central Government, State Government, Union territory (either directly or through an entity wholly controlled by the Central Government, State Government, Union territory). IV. Lastly, Service Recipient must be an Industrial Unit. 2.3 The applicant states that the present lease of land is for thirty years which can be duly indicated in the Allotment Letter dated 21.09.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant states that audit under section 19(2) supra is conducted only for corporations (not being companies) established under law made by parliament and accounts of such corporations are presented before Parliament. Extract of section 19(2) of Comptroller Auditor General s (Duties, Powers Conditions of service) Act, 1971 is reproduced hereunder- The duties and powers of the Comptroller and Auditor-General in relation to the audit of accounts of corporations (not being companies) established by or under law made by parliament shall be performed and exercised by him in accordance with the provisions of the respective legislations. 2.9 According to the applicant, from a conjoint reading of clause (a) to notification 50/2018- Central Tax dated 13.09.2018 and section 19(2) of Comptroller Auditor General s (Duties, Power Conditions of service) Act, 1971 it is evident that more than fifty-one percent of control of SMPK is with Central Government. Therefore, it can be averred that SMPK satisfies the third condition stated above. 2.10 In regard to the last condition, the applicant submits that it is a manufacturing company duly registered under CGST/WBGST Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not produce any evidence on the nature of the land and area to prove it as industrial business area. 3.4 Besides, in the petition itself, the applicant sought for advance ruling on exemption only on the ground of the services of leasing land for industrial purpose, so, the applicant did not go into the financial activity or financial business area clauses. Hence, the comments are restricted only on industrial perspective. 3.5 It is mentioned in the allotment letter that the land was leased for setting up commercial office complex . The commercial office complex may or may not include industrial activity. 3.6 As the term industry is not defined in CGST/WBGST Act, 2017, so, the reference is drawn from Sec 2(7)(j) of the Industrial Disputes Act, 1947, industry means any systematic activity carried on by co-operation between an employer and his workmen (whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature), whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, in paucity of supporting evidences, the undersigned prayed before the authority that the exemption should not be allowed as it does not cover all conditions laid down in the notification mentioned above. Observations Findings of the Authority 4.1 We have gone through the records of the issue as well as submissions made by the authorised advocate of the applicant during the course of personal hearing. We have also considered the submission made by the officer concerned from the revenue. The issue before us is to determine whether the services of leasing of an industrial plot of land at Taratala Road for a period of thirty years (30 years) for setting up commercial office complex against upfront lease premium provided by SMPK to the applicant is exempted from payment of tax or not in terms of entry number 41 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017. 4.2 The crux of the contention of the applicant is that the applicant being an industrial unit has entered into an agreement for having leased out land for a period of thirty years for setting up commercial office complex against upfront lease premium. According to the applicant, the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee Port is with the Central Government and/or State Government, put together . Status of SMPK as a notified person in terms of Notification No. 50/2018 Central Tax dated 13.09.2018. Status of SMPK in respect of audit of books of accounts being done annually by Comptroller and Auditor General of India under section 19(2) of the Comptroller Auditor General s (Duties, Powers Conditions of Service) Act, 1971 read with Section 102(2) of the Major Port Trusts Act, 1963. 4.6 SMPK, in its reply dated 09.06.2023 and 08.12.2023 respectively, has submitted as under: In this regard we would like to inform you that Kolkata Port Trust (Presently Syama Prasad Mookerjee Port, Kolkata) herein after referred as SMPK has been functioning since the year 1853 or so. Initially, SMPK was being administered under the Calcutta Port Act, 1890 after the repeal of the Calcutta Port Act, 1870 and various other related laws. Later on the Calcutta Port Act, 1890 was subsumed with the Major Port Trust Act, 1863. Presently, the SMPK is governed under the Major Port Authorities Act, 2021 through which the Central Government has formed the Board of SMPK which shall be responsible for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per Major Port Authorities Act, audit of SMPK is to be carried out each year by the Comptroller and Auditor General of India (CAG). 4.7 In this context, sub-section (3) of section 44 the Major Port Authorities Act, 2021 which deals with Accounts and audit may be reproduced: (3) The Comptroller and Auditor-General of India and any person appointed by him in connection with the audit of the accounts of the Board under this Act shall have the same rights, privileges and authority in connection with such audit as the Comptroller and Auditor-General of India generally has in connection with the audit of Government accounts and, in particular shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers, and to inspect any of the offices of the Authority. 4.8 On due consideration of the reply given by SMPK and in light of the discussions detailed herein above including scope of audit of CAG, we are unable to conclude that SMPK may be regarded as an entity having 20 percent or more ownership of Central Government merely on the ground that its books of accounts are audited by CAG. We are also unable to hold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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