TaxTMI 
TaxTMI 
2021 (11) TMI 1199
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....stered under the GST Act, 2017, and holds GSTIN:30AAACG7220K1Z0. The Applicant sought an Advance Ruling in respect of the question whether GST is applicable on one time concession fee charged by the applicant in respect of their property at Anjuna, Goa, which is given to M/s Myrayash Hotels Pvt. Ltd., for a long term lease of 60 years for development of infrastructure for financial business or private investment made on DBFOT (Design, Build, Finance, operate and Transfer) providing exclusive right, license and authority to construct, operate and maintain the project. 2. The Applicant claimed exemption as per Sr. No. 41 of the Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017 as amended by the Notification No. 32/2017-Central tax (Rate) dated 13.10.2017. 3. The Authority for Advance Ruling, Goa vide its Order No. Goa/GAAR/4/2018-19/2429 dated 02.10.2018 held that the service provided by the Applicant does not satisfy the criteria mentioned at Sr. No. 41 of the Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017 as amended by the Notification No. 32/2017-Central tax (Rate) dated 13.10.2017. Therefore, they are not entitled for the benefit of the said Notif....
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....03.2019 passed by this Hon'ble Authority. To that limited extent there is error apparent on the face of the record. (ii) The event of taxation or the point of taxation for the purpose of instant case was the execution of agreement dated 9.12.2016 which was executed before the advent of GST wherein the license was created. In view of the same, the GST Act has no application and the Advance Ruling Authority misconceived provisions of Section 142 (10) of the GST Act in as much as the same refers to a continuing service which is not the nature and import of the agreement dated 09.12.2016. 8. Personal Hearing was held on 05.10.2021 through video conference. Shri Parimal Kulkarni of M/s PGK & Co. Chartered Accountants, attended the hearing on behalf of the Applicant and orally submitted following for consideration by the Appellate Authority - (i) That the Advance Ruling Authority as well as the Appellate Advance Ruling Authority had wrongly considered the amount of Rs. 25,20,00,000/- as a onetime upfront concession fee for a term of 60 years @ 42,00,000/- per annum. Whereas, the actual 'One Time Upfront Concession Fee' was Rs. 28,00,00,000/-. This amount was ta....
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....ture for financial business on Private Investment mode on DBFOT basis (Design, Build, Finance, Operate and Transfer) providing exclusive right, license and authority to construct, operate and maintain the project. 15 Statement of relevant facts .having a bearing on the questions(s) raised We have executed Concession Agreement for Renovation / Development of Anjuna property through Private Investment Mode, Goa with Myrayash Hotels Pvt. Ltd., Mumbai on 09th December 2016,............... We have collected amount of Rs. 25,20,00,000/- as a one time upfront Concession Fees for a term of 60 years @ Rs. 4200000/- per annum for use of our Anjuna Property through Private Investment mode on DBFOT basis (Design, Build, Finance, Operate and Transfer). 16 Statement containing the applicant's interpretation of Law and / or facts, as the case may be, in respect of the aforesaid question(s) (i.e. applicant's view point on issues on which the advance ruling is sought). The notification as mentioned below clearly says that GST is not applicable for One Time Concession Fees charged by us in respect of our property namely Anjuna property given to M/s Myrayash Hotels Pvt. L....
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....pted from payment of GST under Sr. No. 41 of Notification No. 12/2017-C.T. (Rate), 28-6-2017 as amended by Notification No. 32/2017-C.T. (Rate), dated 13-10-2017. The Entry No. 41 reads as follows : ''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 for development of infrastructure for financial business, provided by the State Government Industrial Development Corporations or Undertakings or by any other entity having 50 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." 5. Further the applicant submitted that all the conditions for claiming exemption under this entry is satisfied and complied and hence eligible for exemption under entry 41. 10. Recently, the Hon'ble High Court Bombay has dealt with the identical Issue in the matter of Writ Petition No. 12194 of 2017 [2018 (12) G.S.T.L 232 (Bom.) in the case of Builders Association of Navi Mumbai and Neelsidhi Realties v. ....
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.... the nature of continuous supply of service. Therefore, the same is liable to be taxed under GST Act. Advance Ruling under Section 98 of the CGST/GGST Act, 2017. 14. The service provided by the applicant in the instant matter, is not falling under the criterion mentioned at Sr. No. 41 of the Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 as amended by the Notification No. 32/2017-Central Tax (Rate), dated 13-10-2017. Therefore, the applicant is not entitled for the benefits of the said notification and the activity of long term lease is liable for levy of GST". 13. On perusal of the order dated 2.10.2018 of the Authority for Advance Ruling (AAR), it is observed that, while passing the said Order, the AAR had taken into account (i) the written submissions of the applicant, (ii) submissions made during personal hearing, (iii) relevant provisions of law, (iv) relevant orders of Hon'ble Tribunals & Hon'ble Courts, and (v) other relevant material. 13.1 On perusal of para 12, of the order dated 2.10.2018, it is observed that, in their submission dated 24-9-2018, the Applicant had submitted that, as....
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....Tax (Rate) dated 13.10.2017. (iv) On page 12 of the appeal, the Applicant had given the grounds of appeal as under:- "1 The order is not warranted on the facts and circumstances of the case and is opposed to equity, law and justice. 2. The respected AAR-Goa has failed to appreciate the fact that the exemption notification is wide enough to cover the transaction as exempt. 3. The respected AAR-Goa failed to consider that our transaction is that of upfront one time premium and not merely a periodic lease rental collected in advance. 4. The respected AAR-Goa has wrongly restricted the exemption to those entities notified in the Goa Industrial Development Act, 1965 which is not envisaged in the exemption notification. 5. The respected AAR-Goa has wrongly applied the facts of the cases that are different from the facts of our case. 6. The respected AAR-Goa has wrongly applied the facts of the case which in fact when applied correctly shows that our case is very much eligible for the exemption. 7. The appellants crave leave to add, alter, amend and/or rescind any of the above grounds of appeal at the time of or befor....
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....he instant case was the execution of agreement dated 9.12.2016 which was executed pre-GST wherein the license was created, (ii) the GST Act has no application and the Advance Ruling Authority misconceived provisions of 142 (10) of the GST Act in as much as the same refers to a continuing service which is not the nature and import of the agreement dated 09.12.2016. (iii) the Advance Ruling Authority should have invoked Section 142 (11) (b) of the GST Act, 2017 19. All documents and submissions on record have been perused. On perusal of the documents on record, inter-alia, the following facts are revealed:- (i) Letter of Award dated 24.11.2016 of Applicant addressed to Shri Dhaval Atul Barot, Director, of M/s Bharat Infrastructure & Engineering Pvt. Ltd., shows that they were supposed to fulfill six conditions and the first condition was to pay Upfront Concession Fee of Rs. 28,00,00,000/- along with applicable taxes. (ii) Letter dated 7.12.2016 of M/s Bharat Infrastructure & Engineering Pvt. Ltd. addressed to Applicant shows that, M/s Bharat Infrastructure & Engineering Pvt. Ltd. accepted all the six conditions of the Letter of Award dated 24.11....
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....laws have been defined on page 16 &17 of the concession agreement as under: "Applicable laws means all laws, brought into force and effect by GOI or the State Government including rules, regulations and notifications made there under, and judgements, decrees, injunctions, writs and orders of any court of record, applicable to this Agreement and the exercise, performance and discharge of the respective rights and obligations of the Parties hereunder, as may be in force and effect during the subsistence of this Agreement". (viii) Concession period has been defined on page 18 of the concession agreement as under:- "Concession period means a period of 30 years (thirty) years extendable by a further period of 30(thirty) Years subject to no suspension on Concessionaire Event of default having taken place, commencing from the Appointed Date till Date of Transfer. (ix) As per sub-clause 23.1(a) on page 86 of the concession agreement the ownership of all immovable assets including site and civil structures created on the site shall remain with the Authority i.e. M/s GTDCL. (x) The terms of revenue sharing arrangement have been provided in the ....
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.... Act 2017. 22. The sub-section 10 of Section 142 of the GST Act, 2017 reads as under:- "(10) Save as otherwise provided in this Chapter, the goods or services or both supplied on or after the appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax under the provisions of this Act". On perusal of above it is evident that, if contract is entered into prior to the appointed day then goods or services supplied on or after the appointed day in pursuance of the said contract shall be taxable under GST Act. 22.1. The sub-section 10 of Section 142 of the GST Act, 2017 does not specify that the service should be continuous. It may be continuous or not. The provisions of this subsection will be attracted as soon as the terms of this sub section are met viz. if the goods or services or both are supplied on or after the appointed day in pursuance of a contract entered into prior to the appointed day. 22.2. The instant case of the Applicant perfectly fits in the ambit of sub-section 10 of Section 142 of the GST Act, 2017. 23. The clause (b) of sub-section 11 of Section 142 of the GST Act, 2017, reads as under:- "(1....