TaxTMI 
TaxTMI 
2020 (10) TMI 767
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....einafter called the 'Applicant' or 'CMRL') is registered under the GST Vide GSTIN 33AADCC233K1ZO. They have sought Advance Ruling on the following question: Whether leasing of pathway to a person to her/his dwelling unit by CMRL is taxable under GST? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant has stated that they had acquired a portion of the property (including the land which is now leased out to the owner) for public purpose from Dr.K.Prema, D/o Shri Late T. Kanagasabapathi residing at Plot No.2045 E, 2" Avenue, Anna Nagar, Chennai-600040 in Thirumangalam, Anna Nagar on payment of adequate compensation. As per clause 4 of the agreement entered into between CMRL and Dr. K. Prema on 21-08-2019, Dr. K. Prema(lessee) is entitled to use the passage with 3 Meter width and 14 Meter length measuring 452 out of the acquired land for shared access purpose for 35 years and has to pay Rs. 30,00,000/- towards lease amount. It appeared that the arrangement is made sin....
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....on 4, the expression "land" mentioned in the first and second clauses of this section, includes also things permanently attached to e right for the beneficial enjoyment over the land which is not his own, that is owned by CMRL and thus the "dominant heritage/house" and the "Easement right" is bundled together. Thus the applicant claims that the "dwelling unit/house" of the lessee acquires the name of "dominant heritage" under the Easement Act 1882, and as such, the lessee being the owner or occupier of the "dominant heritage" has an Easement right for the beneficial enjoyment over the land which is not his own, that is owned by CMRL and thus the "dominant heritage/house" and the "Easement right" is bundled together. 2.3 The applicant has referred to the illustrations under Chapter 1, Section 4 of Indian Easement Act 1882. They have stated that it is pertinent to note that as per Section 19 of Indian Easement Act, 1882, where the "dominant heritage" is transferred or devolves, by act of parties or by operation of law, the transfer or devolution shall, unless a contrary intention appears, be deemed to pass the easement to the person in whose favour the transfer or devolution takes....
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....of T.V. Ravi in Second Appeal No 232 of 2015 dt 21.11.2016 has held that easement right and dominant heritage cannot be transferred separately by segregating one from the other • Hence, both the pathway and the dwelling unit are inseparable and come under the term "dwelling unit" which is eligible for exemption under Sl.no 12 (Heading 9963 or 9972) of Notification No 12/2017 Central Tax (Rate) dt 28.6.2017. 4.2 The applicant furnished written submission vide their letter dated 10.02.2020, wherein they have stated inter-alia that • the issue is whether the shared path way, which was leased out by CMRL could be considered as a residential property or 'residential dwelling' unit to qualify for the exemption granted by the Notification No. 12/2017-C.T.(Rate) • the portion of the land which was acquired by CMRL from the lessee and then was leased out by CMRL, is in the course of their business and there is no building on the land which was leased out to the lessee as "shared access" but these facts cannot be decisive test to hold that the leased out pathway is not a residential dwelling unit • Hon'ble Supreme Court in the case of Mu....
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....bmissions after PH and the comments of the central jurisdictional officer in the instant case. The question on which advance ruling is requested is as follows: Whether leasing of pathway to a person to her/his dwelling unit by CMRL is taxable under GST? The applicant claims that this land for which the access is shared against a consideration is to be considered as leased for residential dwelling as the pathway provides the existing residential property of Dr. K. Prema, access to the Road. It is their claim that the shared access extended for consideration, is an Easement right extended, should be considered as land appurtenant to the residential dwelling and they are eligible to the exemption at Sl.No. 12 of Notification No. 12/2017-C.T.(Rate) which exempts the 'services by way of renting of residential dwelling for use as residence' classified under SAC 9963 or 9972. The applicant has stated that the extension of lease of shared access is in the course of business and therefore it is a supply under GST. They also agree to receipt of consideration for such supply. The issue before us is whether such supply is eligible for exemption vide Notification No. 12/2017-C.T.(Ra....
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....ation is charged; Section 2(31) of the CGST/TNGST Act states: (31) "consideration" in relation to the supply of goods or services or both includes-(a) any payment made or to be made, whether in money or otherwise, 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..... SCHEDULE II of the CGST/TNGST Act states: ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES 2. Land and Building (a) any lease, tenancy, easement, licence to occupy land is a supply of services; (b) any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services. As per the MOU, The applicant has given the right to use the pathway to the individual so that she can access the main road from her residential property. This pathway is owned by the applicant and is also to be used by both the applicant and the individual. It is clear that this right of use of the 'pathway' ....
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....1 Rental or leasing services involving own or leased residential property 223 997212 Rental or leasing services involving own or leased non-residential property 224 997213 Trade services of buildings 225 997214 Trade services of tin e-share properties 226 997215 Trade services of vacant and subdivided land In the case at hand, the applicant vide the MOU agreed to provide shared access to the pathway for a specific period for a consideration to the lessee. It is clear that it is not an accommodation service and not classifiable under SAC 9963. Further, Section 105 of Transfer of Property Act , 1882 defines 'Lease' as 105. Lease defined.-A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. In this case, the pathway is owned by the applicant and both the applicant....