GST exemption under Section 11 unconditional for institutional plot allotment premium payments to YEIDA

The Allahabad HC allowed a petition challenging GST demand on premium paid to YEIDA for institutional plot allotment. The petitioner was allotted a plot in 2015, with GST becoming applicable to post-June 2017 instalments. The court held that exemption under Section 11 of GST Act 2017 via Notification No. 12/2017 was unconditional, as Column 5 specified "Nil" conditions against Entry 41. Despite subsequent amendments through Notification No. 32/2017, no conditions were introduced for this exemption. The court found YEIDA's demand letter dated 24.08.2018 legally unfounded, lacking factual basis for any condition violation, and quashed the impugned communication.

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Issues Involved:
1. Validity of the demand for GST on premium paid for an institutional plot.
2. Applicability of GST exemption under Notification No. 12/2017 and its amendment.

Summary:

Issue 1: Validity of the demand for GST on premium paid for an institutional plot

The petitioner sought to quash the letter dated 24.08.2018 from YEIDA demanding GST at 18% on the premium of Rs. 3.80 crores for an institutional plot allotted on 28.04.2015. The petitioner argued that the demand was illegal and without authority as no tax demand was raised by the Revenue Authorities. Furthermore, the petitioner claimed exemption under Section 11 of the Goods and Services Tax Act, 2017, supported by Notification No. 12/2017 and its amendment Notification No. 32/2017. The Authority for Advance Ruling had already confirmed this exemption in its order dated 06.06.2018, which had attained finality.

Issue 2: Applicability of GST exemption under Notification No. 12/2017 and its amendment

The court examined Section 11(1) of the Act and the relevant notifications. Notification No. 12/2017, dated 28th June 2017, and its amendment Notification No. 32/2017, dated 13th October 2017, exempted the upfront amount paid for long-term leases of industrial plots from GST. The Authority for Advance Ruling had cleared any doubt by ruling that GST was not applicable to the upfront amount if conditions under Sl. No. 41 of the Notification were satisfied. The court noted that the exemption was unconditional as no specific conditions were mentioned against Entry No. 41 in the notifications.

Conclusion:

The court found the demand letter dated 24.08.2018 from YEIDA to be "wholly unfounded in law and also in facts." It quashed the letter and ordered that any amount deposited by the petitioner pursuant to the impugned communication be refunded within one month, failing which it would attract interest at the rate of 8% from the date of deposit till the date of refund. The writ petition was allowed with no orders as to costs.

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