9911796707
TMI Blog2024 (2) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... NOIDA, which was originally allotted to the appellant by Noida Authority under the 99 years lease deeds. 2. The applicant has sought advance ruling in respect of the following questions: Under the GST provisions, whether activity relating to Sale/Transfer of leasehold Land and building and also to obtain permission for such sale would be taxable? a) In the instant case the GST as applicable on the upfront called premium amount as a cost of land and building? b) If answer Yes, then ITC will be eligible to buyer, may be further use against the supply of their manufactured products. c) Applicability of Notification no. 12/2017 serial no. 41 Heading 9972 One-time upfront amount (called as premium, salami, cost, price, development charges or by any other name) leviable in respect of the service, by way of granting long-term (thirty years, or more) lease of industrial plots, provided by the State Government Industrial Development Corporations or Undertakings to Industrial as GST Tax Nil. The Plot was issued by the NOIDA authority on long-term deed for 99 years. 3. The question is about applicable GST rate under the provisions of CGST Act and liability to pay GST, hence is admis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Direct Taxes vide Circular No. 35/16 dated 13.10.16, long term lease of land constitutes character of 'deemed sale' meaning thereby it is a sale. In our opinion once long-term lease of land is treated as sale, no GST would be chargeable on such activity. Emphasis is relied upon: Transfer of Property Act, 1882- [53A. Part performance. - Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that 2 *, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed there for by the law for the time being in force, the transferor or any person claiming under him shall be debarred f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act'. 9. We have gone through the submissions made by the applicant and have examined the same. The applicant in the present application has sought advance ruling on following question/clarification- Under the GST provisions, whether activity relating to sale/Transfer of leasehold Land and building and also to obtain permission for such sale would be taxable? a) In the instant case the GST as applicable on the upfront called premium amount as a cost of land and building. b) If answer Yes, then ITC will be eligible to buyer, may be further use against the supply of their manufactured products. c) Applicability of Notification no. 12/2017 serial no. 41 Heading 9972 One-time upfront amount (called as premium, salami, cost, price, development charges or by any other name) leviable in respect of the service, by way of granting long term (thirty years, or more) lease of industrial plots, provided by the State Government Industrial Development Corporations or Undertakings to Industrial as GST Tax Nil. The Plot was issued by the NOIDA authority on long terms deed for 99 years. The applicant further wants to clarify that- 1. Seller has been allotted an industrial plot by (Ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r remaining period of 90 years and / or extended /renewed period of lease by Noida. (6) The Transferee is bound by the terms and conditions contained in the original lease dt. 19.11.1983 subject to the modification made by the Noida Authority in the Transfer Memorandum. (7) The terms and conditions mentioned in the Noida Authority's Transfer memorandum are as follows- (a) Lease rent shall be payable as per prevailing policy of the Authority. (b) That any other dues/arrears shall be recovered from the Transferee subject to interest applicable at the time of recovery of dues. (c) The Transferee shall come into commercial production within One year from the date of transfer memorandum. In case of breach of terms and conditions, the lease / transfer deed will be cancelled /revoked and the possession shall be resumed by the Authority, (d) That the Transferee shall be bound by the terms and conditions of lease deed executed between the lease and NOIDA on 19.11.1983 subject to changes mentioned in the transfer memorandum and otherwise, from time to time. (e) The Transferee automatically would inherit all the assets and liabilities connected with the above property. (f) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding a sale, transfer, barter, exchange, license, rental, lense or disposal made or agreed to be made. Section 7 (1A) read with Schedule II under the GST Act provides which of such supplies shall be treated as supply of goods or services. Paragraph 2 of Schedule II provides that with respect to transactions relating to land and buildings, any lease, tenancy, easement, license to occupy the land, letting out of a building including a commercial, industrial or residential complex for business or commerce is the supply of services. In other words, benefits arising from land in the forms specified in paragraph 2 of Schedule 11 are not to be treated as transactions in immovable property but as the supply of service for the purpose of the GST Act. The Deed, therefore, confers upon the applicant no better title to the Demised Premises (the premises whose lease hold right is to be transferred including land and building) to other than a service contract of lease. The applicant can, therefore, transfer to the assignee (M/s S.K. Industries) only its right to receive the service of the lease for the remaining period after obtaining prior approval of the lessor (Noida Authority) 13.3 In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject to GST. But the same is not applicable to subsequent transfer of lease hold rights. Here the seller i.e M/s Remarkable Industries is not a State Government Industrial Development Corporations or Undertakings and hence benefit of Entry No. 41 of exemption Notification is not admissible to the applicant as the condition of the said entry is not satisfied. Hence, Entry No. 41 of Notification No. 12/2017 is not applicable on the party. Here it may be pointed out that the wording in the said Notification, when clear, plain and unambiguous and only one meaning can be inferred, we are bound to give effect to the said meaning. We give due regard to the clear meaning of words and matter should be governed wholly by the language of the notification. We note the wordings of the Notification and its conditions imposed for satisfaction to merit entry in the said serial number. We cannot allow any scope for intendment. Thus as per Entry No. 41 of Notification No. 12/2017-CT dt. 28th June 2017, exemption was limited to the Lease Agreement duly executed between original allottee M/s PEC Equipment A Partnership firm) and Noida (Development Authority) on 19.11.1983 and same was registered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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