TaxTMI 
TaxTMI 
2020 (8) TMI 103
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....ices mentioned in their application. 2. At the outset, it is made clear that the provisions of both the CGST Act and the TGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the TGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and TGST Act. 3. It is observed that the queries raised by the applicant fall within the ambit of Section 97(2) (d) of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- for SGST and Rs. 5000/- for CGST towards the fee for Advance Ruling. The Applicant has declared that the questions raised in the application have neither been decided by nor are pending before any authority under any provisions of the GST Act. The application is therefore, admitted. 4. Brief facts of the case: The facts, in brief, that were reported by the applicant in their application are as follows: a. M/s. Daicel Chiral Technologies (India) Private Limited(hereinafter referred to As 'Appli....
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....ible to avail input tax credit of GST paid on "annual lease rentals" (recurring) towards supply of land on lease for business purpose? iii) Whether the applicant is eligible to avail input tax credit of GST paid on "maintenance charges" collected by the lessor? 6. Applicant's interpretation of law and facts: 1) The eligibility and conditions to take input tax credit of Central Goods and Service Tax ('CGST') and State Goods and Services Tax ('SGST') have been prescribed under Section 16 of Central Goods and Services Tax Act, 2017 ('CGST Act') and Section 16 of Telangana State Goods and Services Tax, Act 2017 ('SGST Act') respectively. Section 16(1) of CGST Act and SGST Act allows a registered person to take credit of input tax charged on any supply of goods or services to him which are used or intended to be used in the course or furtherance of his business. Therefore, in order to avail credit, the person should be a 'registered person' and the services supplied to him should be used in the course or furtherance of his business. 2) Their unit is registered under the GST Act having a valid GSTIN as 36AACCD8423B1Z1. They have availed credi....
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....ear that the lease charges paid for land has been used in course of business and eligible for input credit under section 16(1) of the CGST Act, 2017 and SGST Act, 2017. 5) GST is basically value added tax, which, in turn, is a destination based consumption tax. It is a consumption tax which ultimately must be borne by the consumer. It is operative through credit mechanism wherein the input relief is to neutralize cascading effect of tax. A " consumption tax" derives its name from the fact that tax burden is ultimately borne by the final consumer and business does not bear the burden of the tax, since the business are allowed to take credit of tax paid on inputs supplied/received by them. If therefore input credit is denied to the input service received by the assessee, they will become burden to the assessee, which is against the very grain or principle of GST being a consumption tax. Therefore, they are eligible to avail input credit of GST paid on lease charges of land. 6) Section 16(2) of CGST Act and SGST Act lays down the pre-conditions to avail input tax credit. The conditions prescribed under Sec 16(2) of the Act are as follows: a) Possession of Tax Invoice: T....
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....xcept where -- (A) the Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or (B) such inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply; and (iv) travel benefits extended to employees on vacation such as leave or home travel concession; (c) works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service; (d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. Explanation.--For the purposes of clauses (c) and (d), the expression "construction" includes re-construction, renovation, additions or alterations or repairs, to the extent of capitali....
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....ncluded therein;.... As per Schedule II of CGST Act (Item No. 2), any lease, tenancy, license to occupy land and lease / letting out of a building for business is a supply of 'service',... "Once this law, in terms of the substantive provisions and the Schedule, treats the activity as supply of goods or supply of services, particularly in relation to land and building and includes a lease, then, the consideration therefor as a premium/one-time premium is a measure on which the tax is levied, assessed and recovered."; ...... it is entirely for the legislature to exercise powers conferred by Section 7(2) of CGST Act and issue requisite Notification sans which, merely going by status of CIDCO, it cannot be held that lease premium would not attract / invite liability to pay GST; In view of the above judgement, it is clear that the activity of leasing of land is liable to GST as supply of service and accordingly, they are eligible to avail the GST levied by the lessor on supply of land on lease. 10) Thus, in the absence of any restriction on availment of credit under the GST Act on tax paid on leasing of land service and fulfilment of all the conditions to avail credit, they are el....
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....ss. Explanation. - For the purposes of clauses (c) and (d), the expression "construction" includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property; It may be observed from the above legal provision that input tax credit is barred in r/o goods or services used for construction of immovable property (other than plant or machinery) including when such goods or services are used in the course or furtherance of business. The term immovable property has not been defined under the GST Act. Nevertheless, Sec. 3(26) of the General Clauses Act, 1897 defines "immovable property" as under: "immovable property" shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth." As may be observed from the above, the definition of "immovable property" is an inclusive definition and includes all the things attached to the earth or permanently fastened to anything attached to the earth. 8.5. Now, coming to the case on hand, it is not under dispute that the "lease premium charges", "annual lease rentals" and "....