TaxTMI 
TaxTMI 
TaxTMI 
2024 (2) TMI 708
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.... dated 17.04.1976 and the applicant works under the administrative control of the Infrastructure & Industrial Development Department, Government of Uttar Pradesh. The applicant was entrusted with the responsibility of preparing Master Plan for development of the area, to demarcate and develop sites for various land uses, to allot plot/properties as per regulations, to regulate the erection of buildings and setting up industries and to provide infrastructure and amenities. 3. The Applicant is registered under the provisions of Central Goods and Services Tax Act, 2017 as well as Uttar Pradesh Goods and Services Tax Act, 2017 (herein after referred to as the CGST Act and UPGST Act respectively). The applicant is a "Local Authority' as per Section 2(69) of the CGST Act, 2017 and the applicant is also recognized as a "Local Authority' by the Ministry of Finance, Government of India vide its Office Memorandum dated 20.12.2017 in terms of provisions of section 2(69) of the CGST Act, 2017. 4. The primary function assigned to the applicant by the UPIAD Act, 1976 was to secure the planned development of the Industrial Development Area. NOIDA was declared as "Industrial Development Area" un....
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.... 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% or more ownership of Central Government, State Government, Union territory to the industrial units or the developers in any industrial or financial business area shall be NIL. Following conditions have been specified for applicability of the aforesaid exemption benefits namely : - * upfront amount is payable for granting of long term lease of thirty years or more; The land allotted by the Applicant to developers in the industrial town of NOIDA is long term lease for a period of ninety nine years. Hence the said pre requisite is fulfilled. * the lease is either an industrial plot or for development of infrastructure for industrial or financial business; For development of an industrial area essential infrastructure such as hotels, hospitals, retail spaces, commercial spaces etc. is also developed. Therefore, grant of plots by the applicant for developing necessary infrastructure ....
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....e period and hence GST would not be applicable on allotment of land on long-term basis. They also placed reliance upon the decisions in the case of Archaka Sundara Raju Dikshatulu V Archaka Seshadri Dikshatulu reported in (1928) 54 MLJ 76. They also placed reliance on the CESTAT order in the case of DLF Commercial Projects Corporations V Commissioner of Service tax, Gurugram 2019 - TIOL-1514-CESTAT whrein it was held that development right is benefit arising out of land and therefore, the same is not chargeable to service tax. 7. The application for advance ruling was forwarded to the Central Jurisdictional GST Officer vide letter dated 27.07.2023 and 17.08.2023 to offer their comments/views/verification report on the matter. However, No comments in the matter has been received in the matter. 8. Mr. Sanjeev Dutt, F & AO, Authorized Representative of the applicant appeared for the personal hearing held on 04.08.2023, in virtual mode and reiterated the submissions made in the application of advance ruling. DISCUSSION AND FINDING 9. At the outset, we would like to make it clear that the provisions of both the CGST Act and the UPGST Act are the same except for certain provisions. T....
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...., for the development of industrial infrastructure in the notified industrial town of NOIDA, such as for residential, commercial, retail, hospital, logistics etc. is exempt from payment of GST in terms of Entry No 41 of Notification No 12/2017-CT (Rate) dated 28.06.2017 (as amended by Notification No 32/2017-CT (Rate) dated 13.10.2017) and Entry No 41 of Notification No KA NI-2-843/XI-9(47)/17 (UPGST-Rate) dated 30.06.2017? ii) Whether the upfront amount charged by the Applicant (as lease premium) for granting long-term lease of ninety years is in the nature of transaction for sale of land and therefore outside the scope of levy of GST? 13. From the submissions made by the applicant, we observe that the appEcant has been entrusted the responsibility of planned development of Industrial Development Area, for which they have been receiving bids from prospective customers. After the bids are opened, the plots are allotted to successful bidders and the applicant charges and collects an Upfront amount in the name of lease premium. We find that the above situation is covered under Sr no 41 of the Notification No 12/2017-CT(Rate). The same is reproduced below for the sake of convenienc....
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....n Sr No 41 of Notification 12/2017-CT (Rate), Nil tax rate is applicable on fulfillment of following conditions :- i) There should be an upfront amount for granting long-term lease of thirty years, or more ii) The lease should be for an industrial plot or plots for development of infrastructure for financial business. iii) The plots are allotted by the State Government Industrial Development Corporation or undertakings or by any other entity having at least 20 % ownership of state or central government and iv) Such plots are allotted to the industrial units or the developers in any industrial or financial business area. On going through the application filed by the applicant, it transpires that the conditions stipulated at point no i, iii and iv have been fulfilled by the applicant since there is upfront amount for a long term lease exceeding 30 years, the plots are allotted by entity having 20% ownership or state or central government and the plots are allotted to the industrial units or the developers in any industrial or financial business area. The condition ii) stipulates that the lease should be for an industrial plot or plots for development of infrastructure for f....
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....el "lease deed" submitted by the applicant state that development of infrastructure for financial business. Hence, the leasing of industrial plots or plots for development of infrastructure for financial business by NOIDA to the industrial units or the developers in this notified area for commercial/ mixed use is exempted from the tax. In cases other than that, the applicable rate of Goods and Services Tax in case of leasing services is 18%. 14. The second question raised by the applicant is, whether the long-term lease is in the nature of sale of land, hence outside the scope of supply under the provisions of CGST Act? Para 2(a) of the Schedule II to the CGST Act stipulates that, 'any lease, tenacy, easement, licence to occupy land is a supply of services'. There is no differentiation between long term or short-term lease. Further long-term lease cannot be equated to sale land since in the case of long term lease, the ownership of the leasehold land vests with the lessor. A lease deed is executed between both the parties. The relationship between both parties is that of Lessor and Lessee and not seller and buyer. Further Entry at SI No 5C of Notification 13/2017-CT (Rate) as ame....