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TMI Blog2024 (9) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of the above, the interpretation of applicant that handover of Building structure and railway siding, by the applicant to OMCL tantamount sale of building and covered under clause no. 5 of Schedule -III of CGST Act, 2017, is not correct. Further, applicant has received consideration on handover of Building structure and railway siding. The applicant's other interpretation that consideration received from OMCL is merely a transaction in money, is also not correct. Whether the activity of handing over the possession of Building Civil Structures, Railway siding constructed/erected by the applicant on the land belonging to the State Government, to the new lessee (OMCL) on as is where is basis for a monetary consideration vide the said deed dated 28.06.2023 between the applicant and OMCL constitute a supply or not? - HELD THAT:- The applicant has the obligation to remove the buildings/structures and railway siding within the time specified in the lease deed. However, in the event the buildings/structures and railway siding erected/set-up by the applicant are not removed by the applicant, the State Government have the liberty to sell or dispose of the same in such manner as de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant is, inter-alia, engaged in the business of mining, iron pellets, Noble Ferro Alloys etc. amongst others. The applicant is registered under the CGST Act, 2017 vide GSTIN 21AAACE6607L1ZU (in the State of Odisha). 2.2 The applicant had entered into a lease deed with the Government of Odisha dated 30.03.1988 wherein mining rights in the form of mining lease were granted for Jiling Langalota Iron and Manganese Mines situated at Joda Mining sector of Keonjhar district of Odisha. The period of the said lease deed was valid from 1.10.1984 to 30.09.2004, which was further extended up to 31.3.2020 by the Government of Odisha. 2.3 To carry out the mining operations at the aforesaid mines, the applicant had constructed building Civil Infrastructures along with railway sidings and plant and machinery. The lease deed had exclusively granted the power to the applicant to carry out any operation on the said mines which were necessary for carrying out mining operations. 2.4 As mentioned above, the validity of the lease deed was extended up to 31.03.2020. Thereafter, the Government of Odisha, pursuant to the letter dated 11.01.2021, decided to grant the mining lease to Odisha Mining Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding railway siding to OMCL is the sale of building. The applicant understands that the applicant has transferred the ownership of the building to OMCL and therefore, such transaction qualifies as sale of building. 2.6.1 It is pertinent to refer Section 7 of the CGST Act, 2017 which talks about the scope of supply under the Act. From the definition of Supply, it is understood that the Act has not defined the term supply exhaustively as the definition of the supply begins with the words supply includes . Therefore, the supply under the CGST Act, 2017 is a wider concept and includes all forms of transactions which may constitute supply. 2.6.2 In respect of the transaction in dispute, which involves handing over the possession of Building and Civil Structure, the applicant understands that such transaction is not leviable to GST, in terms of clause (a) of sub-section (2) of Section 7 of CGST Act, 2017. The sub-section 2 begins with the wordings notwithstanding anything contained in sub-section (1) which makes it clear that the present sub-section (2) presides over the definition of supply and even if the transaction satisfies the definition of supply, such transaction will not fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise also, do not fall under the scope of supply. The definition of supply clearly depicts that in order to qualify as supply under section 7 (1) (a) of the CGST Act, 2017, a transaction must be either supply of goods or services. 2.6.7 The transactions in money are specifically excluded from the ambit of services. Accordingly, it is submitted that transaction in money does not involve provision of any service and only refers to mere payment and receipt of money. The applicant submits that consideration received from OMCL is merely a transaction in money as there is no provision of service by the applicant which falls under the scope of supply. The entire consideration is part and parcel of the transaction between the Government of Odisha and OMCL. The mines along with land belong to the Government of Odisha. Therefore, the building and civil structure shall also belong to Government of Odisha. 3.0 The personal hearings were fixed on 11.03.2024 23.04.2024 under due intimation to the applicant, the jurisdictional officer of State Central GST (intimated through their respective Commissionerates along with a copy of the application and the written submission of the Applicant). The Appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er building and civil structure. The Applicant is stated to have already discharged GST on handing over of plant and machinery to OMCL treating the same as supply of goods. 4.3 In order to determine as to whether the activity of handover of Building and Civil Structure, including railway siding, by the applicant to OMCL tantamount to supply of goods or services or both, it is necessary to delve into the relevant provisions of CGST Act as indicated below: 4.3.1 The relevant extract of the Section 7 of the CGST Act, 2017 is as follows: Section 7. Scope of supply.- (1) For the purposes of this Act, the expression - supply includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. Explanation .-For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply; (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; (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 or denomination, to another form, currency or denomination for which a separate consideration is charged; From the above extracted definition of Supply, it is understood that the Act has not defined the term supply exhaustively as the definition of the supply begins with the words supply includes . Therefore, the supply under the CGST Act, 2017 is a wider concept and includes all forms of transactions which may constitute supply. 4.3.3 Clause no. 5 of Schedule III to the CGST Act, 2017 is as below: 5. Sale of land and, subject to clause (b) of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant on the land belonging to the State Government, to the new lessee (OMCL) on as is where is basis for a monetary consideration vide the said deed dated 28.06.2023 between the applicant and OMCL constitute a supply or not. 4.8 The relevant extracts of the Lease deed dated 30.03.1988 between applicant and the Government of Odisha, in respect of the obligation of the Lessee to remove their properties on the expiry of lease is as below: Clause 5 6 of Part IX of Lease deed dated 30.03.1988- 5. The lessees having first paid and discharged rents, rates and royalties payable by virtue of these presents may at the expiration or sooner determination of the said term or within six calendar months thereafter (unless the lease shall be determined under clause 1 and 2 of this part and in that case at any time not less than three calendar months not more than six calendar months after such determination) take down and remove for their own benefit all or any engines, machinery, plant, buildings, structures, tramways, railways and other works, erections and conveniences which may have been erected, set up or placed by the lessees in or upon the said lands and which the lessee are not bound to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay siding to OMCL on as is where is basis for a monetary consideration of Rs. 18,10,51,928/- and Rs. 2,04,65,062/-respectively. In the circumstances where it was 'obligatory on the part of the applicant' to remove the buildings/structures and railway siding in accordance with Clause 5 of Part IX of Lease deed dated 30.03.1988 than otherwise and upon consent of the State Government, the applicant is entering with an agreement with OMCL for handing over the to the possession of Building Civil Structures, Railway siding to OMCL against monetary consideration of Rs. 20,15,16,990/- effectively implies that the applicant has made a contractual promise to the OMCL to refrain from removing the buildings/structures and railway siding erected on the land of the Lessor so that the said structures can be put to use by the new lessee namely OMCL. 4.11 Therefore, the deed dated 28.06.2023 (deed of handing over and taking over Building Civil Structure and Plant Machinery effectively implies that the applicant and OMCL entered into a contractual agreement wherein, the applicant is making a promise to OMCL to refrain from removing the buildings/structures and railway siding erected on the l ..... 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