9911796707
TMI Blog2024 (2) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... uding a commercial, industrial or residential complex for business or commerce is the supply of services. In the instant case, the applicant wants to sell industrial plot to M/s S.K. Industries and transfer the lease rights with the approval of Noida Authority. The moment the lease right is to be transferred from the applicant to M/s S.K. Industries, the part has provided service of transferring the leasehold rights and thus action of the applicant is very well covered under Paragraph 2 of Schedule II of CGST Act 2017. The applicant s interest in the benefits arising out of the Demised Premises is limited to sub-leasing in terms of the Deed, and he is capable of transferring the benefits only to that extent. The assignment, therefore, does not amount to transfer of any benefit other than leasehold rights in terms of the Deed for the unexpired period of the lease and is no transfer of any immovable property in the context of the GST Act - Exemption vide Entry No. 41 of Notification No. 12/2017-CT dt. 28th June 20-17 is also not applicable in the instant case. Entry No. 41 holds that one time upfront amount (called as premium, salami, cost, price, development charges or by any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 admissible under Section 97(2)(a) of the CGST Act 2017. Further, as per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant. 4. Statement of relevant facts having a bearing on the question(s) raised : The applicant wish to Sell their industrial plot at A-38 Sector-8 Noida, to M/s S K Industries A-66 Sector-8, NOIDA, which is originally allotted by Noida Authority under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itute 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 from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.] It is a settled principle that the long-term lease shall be considered as transfer of property and has been adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (New Okhla Industrial Development Authority) Noida on long term lease for 99 years on payment of lump sum upfront premium and on annual lease charges vide lease deed dated 29.11.1983. 2. Seller intends to sell such industrial land cum-building for certain consideration to some buyer. Buyer has to pay transfer charges to Noida for permission for such sale. 10. We have gone through the Form GST ARA-01 filed by the applicant and observed that the applicant has ticked following issues on which advance ruling requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) The Transferee shall be running the project of Engineering Works. (g) The Transferee shall not rent out/sublet the premises (partially/fully) without prior permission of the Authority (h) That the Transferee shall be bound by the terms of allotment/ lease deed/transfer deed as the) stand amended from time to time and shall also be bound by all the rules and regulations framed by the Authorities in this regard. (i) That the Transferee max mortgage the property to any financial institution including bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 instant case, the applicant wants to sell industrial plot to M/s S.K. Industries and transfer the lease rights with the approval of Noida Authority. The moment the lease right is to be transferred from the applicant to M/s S.K. Industries, the part has provided service of transferring the leasehold rights and thus action of the applicant is very well covered under Paragraph 2 of Schedule II of CGST Act 2017. 13.4 It is evident from the above discussion that the applicant, apart from the conditional poss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, 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 on 29.11.1983. 13.7 The activity of assignment is in the nature of agreeing to transfer one's leasehold rights. It does not amount to further sub-leasing, as the applicant's rights as per the Deed stands extinguished. Neither does it create fresh benefit from land other than the leasehold right. It is like a compensation for agreeing to do the transfer of the applicant's rights in favour of the assignee. It is a service classifiable under Other miscellaneous service (SAC 999792) and taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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