Applicability of GST in case of Rehabilitation and Resettlement.

[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?

[Shilpi Jain]

Is there a service in the first place? Maybe not

[THDC India]

On reading of above, it may interpreted as service of tolerance of an act.

[KASTURI SETHI]

Compensation is not an income and hence not consideration. In the absence of the element of 'consideration' it is not supply. Not covered under Schedule-II Para 5 (e) of CGST Act.

[THDC India]

Thank You for sharing your view

AI Summary

GST applicability on rehabilitation and resettlement payments under RFCTLARR questioned; supply versus tolerance classification debated. Applicability of GST on R&R payments under RFCTLARR arises where the District Collector administers payments through the State to affected families; core issues are identification of the supplier and whether payments are a tolerance of an act or non-consideration compensatory amounts that would not constitute a supply and fall under Schedule II exclusion.