Leasing of plots for public amenities exempt from GST; residential construction for officials taxable at 18%

The court held that the leasing of plots by City and Industrial Development Corporation of Maharashtra Limited (CIDCO) to Navi Mumbai Municipal Corporation (NMMC) for specific public amenity purposes and to Panvel Municipal Corporation (PMC) for essential municipal functions is exempt from GST under Notification No. 12/2017-Central Tax (Rate). However, leasing plots to PMC for the construction of residences for the Commissioner and Mayor, deemed personal use rather than official duties, is taxable at 18% GST.

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Issues Involved:
1. Classification of the leasing of plots to Navi Mumbai Municipal Corporation (NMMC) and Panvel Municipal Corporation (PMC).
2. Applicability of GST exemption under Notification No. 12/2017-Central Tax (Rate) for various uses of leased plots.

Issue-wise Detailed Analysis:

1. Classification of Leasing of Plots:
The applicant, City and Industrial Development Corporation of Maharashtra Limited (CIDCO), sought an advance ruling on whether the leasing of vacant plots to NMMC and PMC for specific uses falls under the scope of Entry No. 3 of Notification No. 12/2017-Central Tax (Rate).

2. Applicability of GST Exemption:
The key question was whether the leasing of plots for specific uses is exempt from GST under the said notification.

Lease of Plots to NMMC for Indoor Recreation Centre:
The indoor recreation centre, consisting of a gymnasium, swimming pool, and play courts, accessible to the public for a nominal fee, is considered a public amenity. This falls under Sr. No. 17 of the 12th Schedule of Article 243W of the Constitution, relating to public amenities. Therefore, the leasing of plots for this purpose qualifies as "pure services" provided to a local authority and is exempt from GST under Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate).

Lease of Plots to NMMC for Slaughter House:
The regulation of slaughterhouses is covered under Sr. No. 18 of the 12th Schedule of Article 243W. Hence, leasing plots for setting up slaughterhouses is considered a function entrusted to a Municipality and is exempt from GST under Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate).

Lease of Plots to PMC for Ward Office:
PMC, being a local authority, requires ward offices to perform its functions under Article 243W. The leasing of plots for ward offices is necessary for the execution of PMC's functions and is exempt from GST under Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate).

Lease of Plots to PMC for Commissioner’s and Mayor’s Residences:
The construction of residences for the PMC Commissioner and Mayor is not considered a function under Article 243W. These are for personal use and not for performing official duties. Therefore, the leasing of plots for these residences does not qualify for GST exemption and is taxable at 18% under Chapter Heading 9972, Sr. No. 16, clause (iii).

Conclusion:
The supply of services by CIDCO, by way of leasing plots to NMMC for an indoor recreation centre and slaughterhouse, and to PMC for ward offices, is exempt from GST. However, leasing plots to PMC for the Commissioner’s and Mayor’s residences is taxable at 18% GST.

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