TaxTMI 
TaxTMI 
2018 (10) TMI 1140
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....ment of relevant facts" would constitute a supply under the Central Goods and Services TaxAct, 2017 and Telangana Goods and Services Tax Act, 2017 (herein after referred to as Central and State GST Act)? 2. Whether in the facts and circumstances construction activity undertaken by the Company, with respect to the share belonging to the Partners (as described in the "Statement of relevant facts") would be treated a Supply of Service under the Central and State GST Act? 3. Whether in the facts and circumstances, the recovery of construction cost by the Company from the "Partners" would be the transaction value for purpose of Section 15 of the Central and State GST Act to be valued in accordance with Sec 15 read with Rule 30 of the Central Goods and Services Tax Rules 2017 and Telangana Goods and Services Tax Rules 2017 (Central and State GST Rules)? 4. Whether in the facts and circumstances the vesting of the constructed portion upon the "Partners", would independently constitute a supply besides the supply on account of recovery of construction cost as aforesaid by the Company? Statement of relevant facts having a bearing on the question(s) raised: Gowra Ventures ("GV....
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....g to the company, i.e., the company and the Partners will be the legal owners of their respective constructed portions. The necessary documents or agreements as required under the relevant laws will be entered into by the Partners to give effect to the above arrangement. Statement containing the applicant's interpretation of law based on the facts, in respect of the aforesaid questions: Whether the activity of pooling (amalgamation) of individual parcels of land is a supply? There is no disposal by any of the modes described in terms of Sec 7 of the Central and State GST Act for consideration in this case where the respective land parcels (land 1 and land 2) are amalgamated for purpose of constructing a multi-storied building after obtaining necessary approval from the competent authority under the Building Laws. This is because the parties to the amalgamation retain their respective shares in the combined parcel of land. Whether the construction activity undertaken by the Company is a supply? The construction activity undertaken by the Company falls within the definition of the business as it includes any adventure, whether or not for a pecuniary benefit Sec 2 (1....
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....n by the Central Government or a State Government; (b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply; As per Section 2 (17) of the Central and State GST Act "business" includes- (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of b....
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....deemed to be related if- (i) such persons are officers or directors of one another's businesses; (ii) such persons are legally recognized partners in business; (iii) such persons are employer and employee; (iv) any person directly or indirectly owns, controls or holds twenty-five per cent or more of the outstanding voting stock or shares of both of them; (v) one of them directly or indirectly controls the other; (vi) both of them are directly or indirectly controlled by a third person; (vii) together they directly or indirectly control a third person; or (viii) they are members of the same family; As per Rule 28 of the Central Goods and Services Tax (CGST) Rules, 2017 and Telangana Goods and Services Tax (CGST) Rules, 2017 The value of the supply of goods or services or both between distinct persons as specified in sub-section (4) and (5) of section 25 or where the supplier and recipient are related, other than where the supply is made through an agent, shall- (a) be the open market value of such supply; (b) if the open market value is not available, be the value of supply of goods or services of like kind and quality; (c) if th....
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....th the land of the assessee (Owner 1). The activity of pooling of land owned by Owner1 with that of the owners 2 to 8 needs to be examined in the light of the provisions of Section 7 of the CGST/TGST Act,2017 and the Schedules there under. The provisions of Section 7 of the CGST Act, 2017 is extracted hereunder: "7. (1) For the purposes of this Act, the expression "supply" includes-- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business; (c) the activities specified in Schedule I, made or agreed to be made without a consideration; and (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II. (2) Notwithstanding anything contained in sub-section (1),-- (a) activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Governmen....
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...., whichever is earlier shall be treated as supply of service'. In view of the above the activity undertaken by M/s Gowra Venture Pvt Ltd with respect to the share belonging to the said partners (as described in the "Statement of relevant facts" of the subject Application) is a supply of service under the Central and State GST Act, 2017. 3) Whether in the facts and circumstances, the recovery of construction cost by the Company from the "partners" would be the transaction value for purpose of Section 15 of the Central and state GST Act to be valued in accordance with Sec 15 read with Rule 30 of the Central Goods and Services Tax Rules, 2017 and Telangana Goods an Service Tax Rules, 2017(Central & State GST Rules)? • M/s Gowra Ventures Pvt Ltd(owner 1) is providing the construction service to the Owners 2 to 8 on the amalgamated land belonging to the owner1 and owners 2 to 8 and it is also seen from the subject Application and the said MOU that the Owners 2 to 8 are also Directors of M/s Gowra Ventures Pvt Ltd. Further Section 15 of CGST Act,2017 which stipulates the issue of valuation is extracted hereunder: "15. (1) The value of a supply of goods or services o....
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....1) or sub-section (4), the value of such supplies as may be notified by the Government on the recommendations of the Council shall be determined in such manner as may be prescribed. Explanation.-For the purposes of this Act,-- (a) persons shall be deemed to be "related persons" if-- (i) such persons are officers or directors of one another's businesses; (ii) such persons are legally recognized partners in business; (iii) such persons are employer and employee; (iv) any person directly or indirectly owns, controls or holds twenty-five per cent or more of the outstanding voting stock or shares of both of them; (v) one of them directly or indirectly controls the other; (vi) both of them are directly or indirectly controlled by a third person; (vii) together they directly or indirectly control a third person; or (viii) they are members of the same family; (b) the term "person" also includes legal persons; (c) persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire, howsoever described, of the other, shall be dee....