TaxTMI 
TaxTMI 
2024 (1) TMI 1091
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.... outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression 'GST Act' would mean the CGST Act and the WBGST Act both. 1.2 The applicant submits that he has entered into a leasing agreement with the Shyama Prasad Mookerjee Port, Kolkata (hereinafter referred to as SMPK), a body incorporated under the Ministry of Ports, Shipping and Waterways, Government of India, wherein, the SMPK has agreed to lease a industrial plot of land at Taratala Road for a period of thirty years (30 years) for setting up commercial office complex. The allotment of the plot has been done vide letter bearing number Lnd. 6063/22/2869 dated 21.09.2022. 1.3 The applicant submits further that as per the allotme....
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....tting up commercial office complex against upfront lease premium is exempted from payment of tax vide serial number 41 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 as amended from time to time. The said entry reads as follows: SI No Chapter, Section, Heading, Group or service Code (Tariff) Description of Services Rate (Per Cent) Condition 41 Heading 9972 Upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable in respect of service by way of granting of long term lease of thirty years, or more) of industrial plots or plots for development of infrastructure for financial business, provided by the State Government Industrial Development Corporations or Undertakings or by any other entity having 20 percent or more ownership of Central Government, State Government, Union territory to the industrial units or the developers in any industrial or financial business area. Explanation - For the purpose of this exemption, the Central Government, State Government or Union territory shall have 20 per cent or more ownership in the entity directly or through an entity which is wholly owned by the Centra....
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....ant case. 2.4 The applicant states that the property being leased is industrial plot owned by SMPK and have been leased out for the purpose of setting up commercial office complex. Thus, the second condition as stated above is duly satisfied in the instant case. 2.5 As regards the third condition stated above, the applicant states that the lessor, SMPK in the instant case, is a body incorporated under the Ministry of Ports, Shipping and Waterways, Government of India. The lessor is directly controlled by the Central Government department. 2.6 The applicant argues that SMPK in its official website "smportkolkata.shipping.gov.in" has declared vide notice dated 14.12.2018 bearing reference number FIN/368/B that SMPK is covered under the category of notified persons under notification number 50/2018 Central Tax dated 13.09.2018 and is required to deduct tax under section 51 of CGST/WBGST Act 2017. SMPK is therefore registered as a tax deductor in the state of West Bengal bearing registration number 19AAAJK0361L1DC. 2.7 Section 51 of the GST Act provides deduction of tax at source by the following persons: (a) a department or establishment of the Central Government ....
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....e of West Bengal. Therefore, the applicant fulfils the last condition mention above as well. Submission of the Revenue The officer concerned from the revenue has express his views as under: 3.1 It is a settled fact that the lease period is for thirty years and SMPK is Central Government Undertaking. The applicant is also an industrial unit. There are conditions prescribed in the said Notification to avail exemption (inserted vide Notification 28/2019-Central Tax (Rate) dt 31.12.19 w.e.f. 01.01.2020) as: "Provided that the leased plots shall be used for the purpose for which they are allotted, that is, for industrial or financial activity in an industrial or financial business area: Provided further that the State Government concerned shall monitor and enforce the above condition as per the order issued by the State Government in this regard: Provided also that in case of any violation or subsequent change of land use, due to any reason whatsoever, the original lessor, original lessee as well as any subsequent lessee or buyer or owner shall be jointly and severally liable to pay such amount of central tax, as would have been payable on the upfr....
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....apital has been invested for the purpose of carrying on such activity; or (ii) such activity is carried on with a motive to make any gain or profit, and includes- (a) any activity of the Dock Labour Board established under section 5A of the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948); (b) any activity relating to the promotion of sales or business or both carried on by an establishment. but does not include- (1) any agricultural operation except where such agricultural operation is carried on in an integrated manner with any other activity (being any such activity as is referred to in the foregoing provisions of this clause) and such other activity is the predominant one. Explanation.--For the purposes of this sub-clause, "agricultural operation" does not include any activity carried on in a plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951 (69 of 1951); or (2) hospitals or dispensaries; or (3) educational, scientific, research or training institutions; or (4) institutions owned or managed by organisations wholly or substantially engaged in ....
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.... applicant, the aforesaid factual position leaves no doubt that the applicant has fulfilled all the conditions as specified in entry number 41 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 from the end of the recipient. And that from supplier's end, SMPK also fulfils the condition specified in the said entry. 4.3 We first take the issue to decide whether SMPK falls within the ambit of suppliers as specified in the relevant entry of the exempt notification supra. The applicant argues that since SMPK deducts tax under section 51 of the GST Act and the books of accounts of SMPK is audited by Comptroller and Auditor General of India, it is evident that more than fifty-one percent of control of SMPK is with the Government. 4.4 In regard to the argument of the applicant that the books of accounts of SMPK are audited by CAG, we find it relevant to reproduce the scope of audit and its jurisdiction of Comptroller and Auditor General of India as follows: The accounts of Government Companies are audited by the Comptroller and Auditor General of India (CAG) under the provisions of Section 143(5) to 143(7) of the Companies Act, 2013. The Statutory Auditors (Cha....
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....ormed the Board of SMPK which shall be responsible for administration, control and management of SMPK. As per Section 3 of the Major Port Authorities Act, 2021 the constitution and composition of Board of Major Port Authority shall be as follows: a. Chairperson b. Deputy Chairperson, and c. One Member each from the - (i) Concerned State Government in which the Major Port is situated; (ii) Ministry of Railways; (iii) Ministry of Defence; and (iv) Customs, Department of Revenue; d. Not less than two and not exceeding four Independent Members ; e. One Member not below the rank of Director nominated by the Central Government, f. Two Members representing the interests of the employees of the Major Port Authority. Therefore, the ownership of Syama Prasad Mookerjee Port, Kolkata is vested upon the Board appointed under the Major Port Authorities Act, 2021 and Central Government is not holding any ownership in the SMPK. Further, as per the second proviso of the Major Port Authorities Act, 2021 the Board constituted under the Act shall be a body corporate having perpetual succession and a comm....