TaxTMI 
TaxTMI 
2022 (3) TMI 791
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....y FDCM against transfer of land held under lease for Kolsapada Minor Irrigation Project? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST 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 MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT FACTS: 2.1 The Forest Development Board was established by the Government of Maharashtra in 1969 for converting large block of low value mixed forests into valuable stand by undertaking teak plantations on a large scale. On the recommendations of the National Commission on Agriculture regarding raising of manmade forests, "Forest Development Corporation of Maharashtra Limited" (FDCM Ltd) was incorporated under the Companies Act, 1956 on 16th February, 1974 as a wholly owned Company of State Government of Maharashtra. To achieve the above purpose, land was leased to FDCM Ltd by the Mahar....
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....17,41,92,890. The enhanced amount of Rs. 2,15,72,876 has not been paid to FDCM Ltd and as such FDCM Ltd has not transferred the right to use the above land. The user agency under the State Government of Maharashtra, now wants to pay the balance amount to FDCM Ltd along with the amount of GST applicable on the transaction, if any. B. STATEMENT CONTAINING APPLICANT'S INTERPRETATION OF LAW 2.5 Section 7 of The CGST Act, 2017 determines the scope of supply. Certain activities, specified in schedule 1 of the Act, even made or agreed to be made without a consideration shall be treated as supply. This section also provides activities which are neither supply of goods nor supply of services as specified in Schedule III of the Act while activities to be specifically treated as supply of goods or supply of services are as per Schedule II of the Act. Section 7 (1A) specifies certain supplies to be specifically treated as a supply of goods or supply of services as referred to in Schedule II, which has been reproduced below, Schedule II 2. Land and Building any lease, tenancy, easement, licence to occupy land is a supply of services; any lease or letting out of the building includin....
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....ted and called for final e-hearing on 14.12.2021. The Authorized representative of the applicant, Shri. Indraneel Dani, CA was present. The Jurisdictional officer was absent. The Applicant was directed to produce details and /or documents or correspondence related to consideration received i.e. from whom it is received, specific details regarding the same. Hearing was completed accordingly. 05. OBSERVATIONS AND FINDINGS: 5.1 We have perused the documents on record and considered the submissions, both oral and written, made by the applicant. 5.2 We find that, M/s Forest Development Corporation of Maharashtra Limited", the applicant, is a wholly owned Company of State Government of Maharashtra and it has been leased certain land by the Maharashtra State Forest and Revenue Department (MSFR department) and, the applicant has undertaken plantation and harvesting activities, predominantly of teak and further, has been collecting and paying GST on sale of teak and other woods. It is further stated by applicant that, a part of the land allocated under lease to it is required to be diverted for the Kolsapada Minor Irrigation project for which the applicant shall be paid compensation. 5.....
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....t as mentioned in the application. Thus, in respect of the land to be transferred to the Irrigation Department, as and when the transfer is done it would have the effect of making MSFR Department as the lessor and the Irrigation Department as the lessee (with the applicant being nowhere in the picture) and presumably the lease rent if any, would be paid by the Irrigation Department to MSFR Department. 5.8 In view of the scenario mentioned in 5.7 above, we need to find out whether the subject transaction is a supply of service by the applicant. Prima facie, we find that the land will not be leased by the applicant to the Irrigation Department. In fact, the applicant will be relinquishing its lease right on the said land in favour of Irrigation Department on the directions of the owner of the land i.e. MSFR Department. 5.9.1 Section 7 of the CGST Act, 2017 which defines "supply" is reproduced as under:- 7. Scope of supply.- (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....