Applicability of GST in case of Rehabilitation and Resettlement amount paid to State Governmetn

[THDC India]

Whether GST is payable on amount paid against Rehabilitation and Resettlement under RFCTLARR to District collector. It is to state that that District collector is administrator and finally amount would be paid to affected family.

[KASTURI SETHI]

Query is too brief to reply. Pl.elaborate.

[Amit Agrawal]

As rightly said by Shri Kasturi Sethi Ji, the query is too brief to answer. And context of the query is also not fully clear, at-least to my mind.

Furthermore, one needs to really study THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND ACQUISITION, REHABILITATION AND RESETTLEMENT ACT, 2013, rules and regulations etc. to answer the questions raised.

As I have not done the same, kindly allow me to give few pointers:

A. If service provider is not 'the Central Government, State Government, Union territory or local authority, RCM may not apply.

B. If subject amount paid is for 'agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act' or not.

C. If subject amount paid is part of consideration for buying the land, GST may not apply.

These are strictly personal views of mine and the same should not be construed as professional advice / suggestion.

[THDC India]

Ministry of Coal is has allotted land for coal mining in MP. In order to develop land for mining, owner of such land and nearby are required to be rehabilitated and resettled. This rehabilitation and resettlement (R&R) is required to be as per RFCTLARR,2013. As per RFCTLARR, District collector is appointed as a administrator under whom this R&R is to be implemented. Under this R&R, certain amount is being paid to Gov. of MP,who will pay such amount to affected family. Following are the queries in this case:

1.Who is the supplier in this case whether land owner or Gov. of MP?

2.Whether this should be considered as tolerance of an act?

AI Summary

GST applicability on rehabilitation and resettlement payments hinges on supplier identity and payment characterisation for tax treatment. Whether GST applies to amounts paid to the district collector for onward payment to affected families under the land acquisition rehabilitation and resettlement framework hinges on (1) identifying the supplier for GST purposes and (2) characterising the payment as consideration for tolerance/restraint or as part of land purchase consideration; these characterisations determine taxability and whether reverse charge applies, and require detailed statutory and factual analysis.