TaxTMI 
TaxTMI 
2024 (9) TMI 41
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.... would like to make it clear that the provisions of both the CGST Act and the OGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the OGST Act. 2.0 Submission of the Applicant 2.1 M/s. Essel Mining Industries Ltd. (hereinafter referred to as "the applicant"), is a public limited company registered under the Companies Act, 1956. The applicant is, inter-alia, engaged in the business of mining, iron pellets, Noble Ferro Alloys etc. amongst others. The applicant is registered under the CGST Act, 2017 vide GSTIN 21AAACE6607L1ZU (in the State of Odisha). 2.2 The applicant had entered into a lease deed with the Government of Odisha dated 30.03.1988 wherein mining rights in the form of mining lease were granted for Jiling Langalota Iron and Manganese Mines situated at Joda Mining sector of Keonjhar district of Odisha. The period of the said lease deed was valid from 1.10.1984 to 30.09.2004, which was further extended up to 31.3.2020 by the Government of Odisha. 2.3 To carry out the mining operations at the aforesaid mines, ....
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....lue of Rs. 18,10,51,928/- and Rs. 2,04,65,062/- respectively, is sale of building which is not leviable to GST as per the clause no. 5 to Schedule III of the CGST Act, 2017. The applicant requests the Hon'ble Odisha Authority for Advance Ruling to issue ruling on whether such handover of Building and Civil structures by the applicant is covered under clause no.5 to Schedule III of the CGST Act, 2017. 2.6 APPLICANT'S INTERPRETATION As per the applicant's understanding, handing over possession of the building including railway siding to OMCL is the sale of building. The applicant understands that the applicant has transferred the ownership of the building to OMCL and therefore, such transaction qualifies as sale of building. 2.6.1 It is pertinent to refer Section 7 of the CGST Act, 2017 which talks about the scope of supply under the Act. From the definition of Supply, it is understood that the Act has not defined the term supply exhaustively as the definition of the supply begins with the words "supply includes". Therefore, the supply under the CGST Act, 2017 is a wider concept and includes all forms of transactions which may constitute supply. 2.6.2 In respect of th....
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....ods nor supply of services as per clause no. 5 of Schedule-III to the CGST Act, 2017, as extracted above. Therefore, the applicant is not liable to discharge GST on the entire transaction. 2.6.5 So far as railway siding is concern, according to the applicant, the same is also in the nature of "building" and therefore, outside the purview of GST. 2.6.6 Without prejudice to the submission made above by the applicant, even if the applicant assumes that the ownership of the building does not belongs to the applicant, the entire transaction, otherwise also, do not fall under the scope of supply. The definition of supply clearly depicts that in order to qualify as supply under section 7 (1) (a) of the CGST Act, 2017, a transaction must be either supply of goods or services. 2.6.7 The transactions in money are specifically excluded from the ambit of services. Accordingly, it is submitted that transaction in money does not involve provision of any service and only refers to mere payment and receipt of money. The applicant submits that consideration received from OMCL is merely a transaction in money as there is no provision of service by the applicant which falls under the scope of supp....
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....ing & Civil Infrastructures along with railway sidings and plant and machinery. After the expiry of lease deed, the Government of Odisha, decided to grant the mining lease to Odisha Mining Corporation Limited ("OMCL"). The applicant and OMCL entered into a deed dated 28.06.2023 for "handing over and taking over of building & civil structure and Plant & Machinery" on "as is where is basis". The Applicant has charged consideration of Rs.39,84,736/-for handing over of Plant and Machinery, Rs. 2,04,65,062/- for handing over railway siding and Rs. 18,10,51,928/- for handing over building and civil structure. The Applicant is stated to have already discharged GST on handing over of plant and machinery to OMCL treating the same as supply of goods. 4.3 In order to determine as to whether the activity of handover of Building and Civil Structure, including railway siding, by the applicant to OMCL tantamount to supply of goods or services or both, it is necessary to delve into the relevant provisions of CGST Act as indicated below: 4.3.1 The relevant extract of the Section 7 of the CGST Act, 2017 is as follows: Section 7. Scope of supply.- (1) For the purposes of this Act, the expressio....
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....r 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; (b) the monetary value of any act or forbearance, 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: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply; (52) "goods" means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply; (102) "services" means anything other than goods, money and securities but includes activities relating to....
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....d railway siding. The applicant's other interpretation that consideration received from OMCL is merely a transaction in money, is also not correct. 4.6 As per provisions under sub-Section 1A of Section 7 of the CGST Act, 2017, in order to treat an activity as either supply of goods or services as referred to in Schedule-II, it is necessary to determine as to whether the said activity constitutes a Supply in accordance with provisions of sub-section (1) of Section 7 of the of the CGST Act, 2017. 4.7 Now the moot question is whether the activity of handing over the possession of Building & Civil Structures, Railway siding constructed/erected by the applicant on the land belonging to the State Government, to the new lessee (OMCL) on "as is where is basis" for a monetary consideration vide the said deed dated 28.06.2023 between the applicant and OMCL constitute a supply or not. 4.8 The relevant extracts of the Lease deed dated 30.03.1988 between applicant and the Government of Odisha, in respect of the obligation of the Lessee to remove their properties on the expiry of lease is as below: Clause 5& 6 of Part IX of Lease deed dated 30.03.1988- 5. The lessees having first paid....
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....vernment for mining activities in accordance with the lease deed 30.03.1988. After expiry of the validity of the lease deed on 31.03.2000, the State Government vide their letter dated 11.01.2021, decided to grant the mining lease to Odisha Mining Corporation Limited (hereinafter referred to as the "OMCL") which is a wholly owned corporation of the government of Odisha. As per the consent of the State Government, applicant entered with an agreement with OMCL vide a deed dated 28.06.2023 (deed of handing over and taking over Building & Civil Structure and Plant & Machinery) wherein the applicant agreed inter-alia to hand over the possession of Building & Civil Structures, Railway siding to OMCL on "as is where is basis" for a monetary consideration of Rs. 18,10,51,928/- and Rs. 2,04,65,062/-respectively. In the circumstances where it was 'obligatory on the part of the applicant' to remove the buildings/structures and railway siding in accordance with Clause 5 of Part IX of Lease deed dated 30.03.1988 than otherwise and upon consent of the State Government, the applicant is entering with an agreement with OMCL for handing over the to the possession of Building & Civil Structur....