TaxTMI 
TaxTMI 
2019 (6) TMI 1009
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....cipal Corporation('NMMC'), for intended development thereof and construction of buildings by the latter on each of those plots. demarcated for separate use as: (i) Indoor Recreation Centre, (ii) Slaughter House; (b) Panvel Municipal Corporation('PMC'), for intended development thereof and construction of buildings by the latter on each of those plots. demarcated for separate use as: (i) PMC Ward Office(s), (ii) PMC Commissioner's residence, and (iii) PMC Mayor's residence; can be said to covered within the scope of entry at Sr. No. 3 or any other entry of the Notification No. 12/2017-CentraI Tax (Rate) dated 28.062017 as amended by Notification No. 32/2017-CentraI Tax (Rate) dated 13.10.2017, 47/2017-central Tax (Rate) dated 14.11.2017 further amended by Notification No. 02/2018-CentraI Tax (Rate) dated 25.01.2018 read with parallel notifications issued under the MGST Act, 2017? Please note that each allotment of plot for specific use would be a different transaction of supply of service by CIDCO. At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the ....
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....etc. amounts to 'supply of services' in terms of Section 7(1)(d) of the CGST Act, 2017 read with the respective entries at Sr. No. 2(a) of Schedule II, of both the CGST Act, 2017 and the MGST Act, 2017. The said services merit classification under Heading 997212 for 'Real Estate Services' and otherwise may attract CGST @9% and SGST @ 9% They have submitted that the present ambiguity regarding whether the supply of services by CIDCO in the instant case falls within the ambit of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 or Notification No. 12/2017-State Tax (Rate) dated 29.06.2017, has arisen due to the absence of a definition of "Pure services' in the CGST Act or MGST Act or the relevant Notifications where these words are mentioned due to which the subject application has been filed. They have submitted that they are eligible to file the subject application. The applicant has submitted as under:- 1. The transfer by way of long term lease for 60 years of plot to NMMC, to be developed for use as 'Indoor Recreation Centre' and 'Slaughter House' and to PMC to be developed as "PMC Ward Office", "P MC Commissioner's Residence" and "PMC Mayor's Residence" a....
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....nstitutions of self-government". Hence, the said pure services of CIDCO can be said to be by way of any activity in relation to and as a precursor to the functioning of PMC. The construction of PMC Mayor's residence on the plot allotted by CIDCO is squarely covered within the scope of Article 243W Of the Constitution of India which reads thus: "the Legislature of a State may, by law, endow- (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government.. Without the logistical support in the form of the PMC Mayor's residence from where the Chairperson of the Ward Committee of the Municipality (here, 'PMC') operates and in the absence of provision of such facility of accommodation, the Mayor as the Chairperson of the Ward Committee within the particular Municipal Corporation jurisdiction and in turn, the said Municipality (here, 'PMC') could not be expected to carry out their function as 'institutions of self-government'. The aforesaid residence is also intended to be used as office in the execution of duties as Mayor .Hence, the said pure services of CIDCO can be said to be by way of....
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....t the applicant i.e CIDCO is a registered person under GST Act. It is seen that in terms of Government Order vide GR No. NMC/1092 / 1049/CR-121/92/UD-20 dated 06.01.1994 issued by the Urban Development Department under the Government of Maharashtra CIDCO proposes to hand over lands/ plots reserved for public purposes in the Development Plan of New Bombay, to NMMC and PMC. on lease for a period of 60 years from the date of execution of 'Agreement to Lease', for intended development thereof and construction of buildings by both NMMC and PMC on each of those plots. In the case of Advance Ruling Application filed by M/s. Leena Powertech Engineers Private Limited before this Bench, we have already held that the applicant i.e. CIDCO is clearly covered under the definition of 'Government Entity' since it is constituted and established by the State Government of Maharashtra with 100% participation by way of Equity or Control to carry out the function of development of new township of New Bombay. Hence in the subject case we continue to hold that the applicant can be considered as a 'Government Entity'. We also are of the opinion that the NMMC and PMC are Municipal Corporations which ....
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.... 243W of the Constitution." As per Sr.No 2 (a) of Schedule II of the CGST Act, 'any lease, tenancy, easement, licence to occupy land is a supply of services'. Hence, any supply which is either deemed as services under Schedule II of CGST Act or which are not covered under the definition of goods shall be categorized as pure services. However, as per the above mentioned notification, works contract services or other composite supplies involving supply of any goods are not covered in Sr. No. 3. Since we find that the said supply is in the form of Pure Services then Sr. No, 3 of the Notification No. 12/ 2017-Central Tax (Rate) dated 28.06.2017 comes into play in the subject case. The same is reproduced as below:- Sl. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition (1) (2) (3) (4) (5) 3 Chapter 99 Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority by way of any activity in relation to any function entru....
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....sion of urban amenities and facilities such as parks, gardens, playgrounds. 13. Promotion of cultural, educational and aesthetic aspects. 14. Burials and burial grounds; cremations, cremation grounds; and electric crematoriums. 15. Cattle pounds; prevention of cruelty to animals. 16. Vital statistics including registration of births and deaths. 17. Public amenities including street lighting, parking lots, bus stops and public conveniences. 18. Regulation of slaughter houses and tanneries. We now take up each issue for discussions as under:- LEASE OF PLOTS TO NMMC FOR INDOOR RECREATION CENTRE NMMC proposes to set up the indoor recreation centre which shall consist of a gymnasium, swimming pool and play courts, all of which facilities shall be accessible to the general public for a nominal fee. This can be considered to be a kind of a Public Amenity which is given to the citizens of the country and the public at large. Sr. No 17 of the 12th Schedule under Article 243W is with respect to 'Public amenities including street lighting, parking lots, bus stops and public conveniences' An Indoor Recreation Centre can be consider....
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....OMMISSIONER'S AND MAYOR'S RESIDENCES. The applicant has mainly stated that the said residences are the places from where the PMC Commissioner as well as the Mayor function from. Their submission cannot be accepted. The Commissioner operates from his own office and so does the Mayor. The very fact that the applicant has submitted that the plots are for residences would mean that the same are for the personal use of the concerned officials. Construction of residence for officials cannot be considered to be a function envisaged under Article 243 W of the Constitution of India. We do not agree with the applicant's contention that the leasing of land for construction of building for use as PMC Commissioner's and PMC Mayor's residences falls within the scope of Entry 2 of Twelfth Schedule to the Constitution of India relating to "Regulation of land-use and construction of buildings" or within the scope of any of the Entries of the Twelfth Schedule to the Constitution of India. Clause (vi), Sr. No. 3 of Notification 11/2017-CT (Rate) dated 28.06.2017, as amended is reproduced below: Sl.No. Chapter, Section or Heading Description of Service Rate (per cent.) Condition....
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....ter 99 All Services Section 7 Financial and related services; real estate services; and rental and leasing Services 16 Heading 9972 (i) Services by the Central Government, State Government, Union Territory of local authority to governmental authority or government entity, by way of lease of land. Nil - (ii)............. Nil - (iii) Real Estate Services Other that (i) and (ii) above 9 ...................... In view of Sr.3 clause (vi) (c) and Sr. No. 16, lease of plots for such constructions to be carried out, as in the subject case, will not be exempt and will be covered under Chapter 9972. 06. In view of the extensive deliberations as held hereinabove, we pass an order as follows : ORDER (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA-93/2018-19/B-39 Mumbai, dt. 13-04-2019 For reasons as discussed in the body of the order, the questions are answered thus - Question (1) Whether the supply of services by the applicant, of 'transfer by way of lease' of vacant plots of 'Maharashtra State G....