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TMI Blog2024 (12) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. 4. The provisions of both the CGST Act 2017 and APGST Act 2017 are the same except for certain provisions. Therefore unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the APGST Act 2017. 1. Preamble: The present application has been filed under Section 97 of the Central Goods & Services Tax Act, 2017 and AP Goods & Services Tax Act, 2017 (hereinafter referred to CGST Act and APGST Act respectively) by M/S JAY, GSTIN 37BMWPM6828D1ZG (herein after referred to as applicant). 2. Brief Facts of the case: M/s JAY, a building owner who is registered under GST Act, 2017 with GSTIN No. 37BMW6828D1ZG (Central Jurisdiction), on the rolls of the Superintendent, Central GST, Kurnool -I Range, Kurnool Division and filed GST ARA-01 under rule 98 of GST Act 2017. The applicant has owned a Commercial Building at Prasad's Complex, D.No.96-3-72-124-1, Santosh Nagar, Kurnool admeasuring 18,888 sft. and the said building was leased out for setting up of the Institution of Lokayukta of Andhra Pradesh a parliamentary ombudsman formed by the Government of Andhra Pradesh under the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the lease deed. Further as per the orders of the Government of AP, the District Revenue Office, Kurnool "lessee" has executed lease deed with Sri. M.V.V. Prasad the lessor, on 11th day of July, 2024 for renewal of lease deed with existing rent upto 31-03-2025 or till suitable government premises are Identified without any escalation, GST and Maintenance charges for the Institution of Lokayukta, Andhra Pradesh at Kurnool. Meanwhile, the Lokayukta of Andhra Pradesh has made an order against the applicant's complaint on the 6th day of September, 2024 and delivered the judgement, as the Complainant is present and expressed his willingness to withdraw the complaint and want to approach Hon'ble High Court of AP In the matter. The same is recorded and the complainant is permitted to withdraw the compliant and the complaint is closed as withdrawn, without prejudice to the contentions raised by the complainant giving liberty to the complainant to approach appropriate court of law for redressal of his grievance. The building owner filed an application under Rule 98 of GST Rules, 2017 in Form GST ARA-01 seeking clarification/ruling on the issue of GST payable on the amount r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng: A personal hearing was conducted on 21.10.2024, which was attended by the authorized person, M. VenkataVara Prasad, Proprietor and reiterated the submissions made in the application and prayed for clarification on the issues mentioned supra. 8. GROUNDS AND PRAYER OF THE PETITIONER AS PER THE APPLICATION: "My building G + 4 Floor has 18,888 SFT, leased out to AP Lokayukta when Government called for tenders, I quoted price per SFT and also stated that GST on Rent has borne by Lessee in executed Lease Deed. (The District Collector, Kurnool) has agreed to pay GST on Rent as applicable. After occupying the building by said Government Dept., issued Memo stating that GST on Rent which is payable by Government has to borne by owner/lessor for private buildings occupied by Government. I filed a complaint in A.P. Lokayukta for release of Rent as per agreed deed including ST issue is still pending in Lokayukta. I expressed by will for renewal of Deed to pay as per agreed lease Deed submitted G.O. after 6 months from expiry of lease Deed that only rent without GST." 9. Discussion and Findings: We have carefully gone through the submissions made by the applicant in the advance ruling a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecifically describes the expression supply which includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. Section 7 (1A) of CGST/SGST ACT 2017further describes certain activities or transactions constitute a supply in accordance with the provisions of sub section (1), they shall be treated either supply of goods or supply of services as referred to in Schedule II. * Schedule II of the GST Act (Goods and Services Tax) describes the activities as "supply of goods" or "supply of services." * Para 2 (b) reads as any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services. Section 9 (1) the charging section under which CGST/SGST is levied on all types of intra state supplies of goods or services or both on the value determined under section 15 which is collected in such manner as prescribed and shall be paid by the taxable person. APPLICABILITY OF GST ON LEASE: GST shall apply on lease or l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per GST Act, GST on rent - who has to pay, owner or tenant?
Ruling: GST on lease as discussed above is to be paid by the registered service provider (building owner) under forward charge mechanism unless a specific provision shifts the liability to the recipient of the service (tenant) under the Reverse Charge Mechanism (RCM). In the instant case, the service provided by the applicant qualifies as the leasing out of immovable property, a taxable supply under Section 7 (1A) of the CGST/SGST Act, 2017, and liable for remitting GST on lease/Rent consideration under Section 9 read with section 15 of the GST Act.
Question 2: Is there any special provision in the GST Act for Government-occupied private buildings?
Ruling: There is no specific provision in the GST Act regarding government-occupied private buildings.
Question 3: Who is liable for GST on rent, owner or tenant?
Ruling: answered at sl no.1
Question 4: Is there any such Act in GST that GST on rent has to be borne by the owner for government - occupied private buildings?
Ruling: answered at sl no.1.
Conclusion:
The applicant is liable to remit GST on rental services provided by them. X X X X Extracts X X X X X X X X Extracts X X X X
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