Transfer of Freehold Land Not Subject to GST, Leasehold Land Taxable at 18%

The ruling determined that the transfer of ownership of Freehold land is not subject to GST as it falls under Schedule III of the CGST Act, 2017. Leasehold land transfer is taxable at 18% unless exempt under Notification No. 12/2017. Annual lease rent is also taxable at 18%. The recipient cannot claim Input Tax Credit on inward goods and services.

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Issues Involved:
1. Applicability of GST on transfer of Leasehold land.
2. Applicability of GST on transfer of ownership of Freehold land.
3. Applicability of GST on Annual Lease Rent.
4. Applicability of GST Rate on the above cases.
5. Eligibility to claim Input Tax Credit (ITC) on inward goods and services.

Issue-wise Detailed Analysis:

1. Applicability of GST on transfer of Leasehold land:
The ruling discusses that leasing of land is treated as a supply of service under Schedule II of the CGST Act, 2017, specifically under entry 2(a) which states, "any lease, tenancy, easement, licence to occupy land is a supply of services." Leasing services involving residential and non-residential property are covered under SAC 997211 and SAC 997212 respectively, with an applicable GST rate of 18%. However, Notification No. 12/2017-Central Tax (R) dated 28.06.2017 exempts GST on the upfront amount for long-term leases (thirty years or more) of industrial plots or plots for development of infrastructure for financial business provided by government entities. The ruling concludes that if the leasing of property by RSCCL falls under this notification, it is exempt from tax; otherwise, it is a taxable supply of service.

2. Applicability of GST on transfer of ownership of Freehold land:
The ruling clarifies that "sale of land" is covered under Schedule III of the CGST Act, 2017, and is excluded from GST levy as it is neither a supply of services nor a supply of goods. The ruling emphasizes that the development activities carried out by RSCCL do not change the nature of the land. The sale of land, even after development, remains a sale of land and is not taxable. The consideration received by RSCCL against the transfer of ownership of Freehold land is not subject to GST.

3. Applicability of GST on Annual Lease Rent:
The ruling states that leasing of land for commercial purposes is a taxable supply of service under entry 2(a) of Schedule II of the CGST Act, 2017, and attracts GST at the rate of 18%. This applies to annual lease rent charged by RSCCL.

4. Applicability of GST Rate on the above cases:
The ruling provides a summary of GST applicability:
- The amount received by RSCCL against the transfer of ownership of Freehold land is not taxable under the GST Act.
- The amount received against the transfer of Leasehold land is taxable under leasing services and attracts GST at 18%, unless exempt under Notification No. 12/2017-Central Tax (R) dated 28.06.2017.

5. Eligibility to claim Input Tax Credit (ITC) on inward goods and services:
The ruling concludes that RSCCL, as a service provider, cannot claim ITC on their inward goods or services. This decision is based on the nature of their activities and the specific provisions of the GST Act.

Ruling Summary:
- Leasehold Land: Exempt from GST if covered under Notification No. 12/2017; otherwise, taxable at 18%.
- Freehold Land: Sale of land is not taxable.
- Annual Lease Rent: Taxable at 18%.
- GST Rate: 18% for leasing services unless exempted.
- ITC Claim: Not permissible for RSCCL on inward goods or services.

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