TaxTMI 
TaxTMI 
2025 (5) TMI 1505
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....ity for Advance Ruling Regulations, 2018. 1.1 At the 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 it intends to get a land from West Bengal Housing Infrastructure Development Corporation Ltd., a Government of West Bengal Company on 99 years lease for setting up of Hotel-cum Shopping and Multiplex under the principal use-Assembly - Mercantile Retail, which includes the permission to construct certain area as residential flats. 1.3 The applicant has made this application under sub section (1) of section 97 of the GST Act and the rules made there under raising following question....
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.... being the lessee, will be permitted to sub-lease/ assign right on constructed area. Moreover, clause no. (xi) of the draft says lessee shall not sub-divide or sub-lease the demised land/ or any part thereof. However, the building constructed thereon or the structure constructed thereon / or any part thereof may be allowed for sub-leasing/ sub-letting/ assignment by the lessor i.e. WBHIDCO on result of specific proposal keeping the principal use unchanged and on payment of prescribed fees, if any. There is an option for lessee for renewal of lease for the like term on expiry of original lease. 2.3 Clause (xiii) of the said lease deed says that when lessee does not continue till expiry of lease period, then lessor (WBHIDCO) shall take over the land at original premium taken plus cost of construction done thereon at depreciated value. This clause clearly shows that if lease is not renewed, then constructed area thereon at depreciated value lies with lessee or then owner of constructed area. The applicant lessee shall assign similar clause of right to prospective customer and thus prospective customer only shall be eligible for such amount towards constructed area, if lease is not ....
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.... Providing constructed commercial units to its prospective clients at periodic payment for agreed period with no right to client at the end of term covered under clause HSN 996329, Accommodation services, Sr No. 7 (iv) of rate no. 11/2017 dated 28-6-2017 as amended 18% 5 Providing maintenance services for monthly or periodic payment to residential unit holders whether falling under 1 or 3 covered under clause HSN 9995, Services of membership organisations, Sr No. 33 of rate no. 11/2017 dated 28-6-2017 as amended, eligible for exemption as per Sr No. 77 (c) of rate no.12/2017 dated 28-6-2017 as amended 18% 6 Providing maintenance services for monthly or periodic payment to commercial unit holders whether falling under 1 or 3 covered under clause HSN 9995, Services of membership organisations, Sr No. 33 of rate no. 11/2017 dated 28-6-2017 as amended 18% 2.7 Further some judicial references are also being submitted as under : There is one more ruling by Maharashtra AAAR in GST regime. In the said ruling, the decision was against the applicant, however, the principle inferred from it is that any transfer of land, whether termed as lease or not for....
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....ne through the records of the issue as well as submissions made by the authorized representative of the applicant during the course of personal hearing. We have considered the questions raised in the application on which advance ruling is sought by the applicant and the relevant facts along with the arguments made by the authorized representative during the time of personal hearing. 3.2 The first question raised by the applicant whether any kind of GST is applicable on its construction work for the prospective clients in two cases i) when lump sum payment is charged and ii) when periodic payment is charged for agreed term. In applicant's submission, we found that applicant intends to get the land from WBHIDCO on 99 years lease for the purpose of setting up of Hotel-cum Shopping and Multiplex under the principal use-Assembly-Mercantile Retail and construct certain area as residential flats. The term Assembly - Mercantile Retail defines as - (i) Assembly building: Any building or part thereof where groups of people congregate or gather for amusement or recreation or for social, patriotic, civil, travel, sports and similar other purposes as the principal ....
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....ication no. 11/2017Central Tax (Rate) dated 28.06.2017 as amended by 03/2019 Central Tax (Rate) dated 29.03.2019, subject to conditions mentioned in the said notification, we have found that : Sl.No. Chapter Heading/Sub-Heading Description of Goods Rate of Tax (CGST) 3 Heading 9954 (ia) Construction of residential apartments other than affordable residential apartments by a promoter in an RREP which commences on or after 1st April, 2019 or in an ongoing RREP in respect of which the promoter has not exercised option to pay central tax on construction of apartments at the rates as specified for item (ie) or 3.75% (if) below, as the case may be, in the manner prescribed therein, intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. (Provisions of paragraph 2 of this notification shall apply for valuation of this service) [emphasis added] (ib) Construction of commercial apartments (shops, offices, godowns etc.) by a promoter in an RREP which commences ....
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....te) dated 28.06.2017 as amended by 03/2019 Central Tax (Rate) dated 29.03.2019, the pivotal point of qualification for payment of taxes at a lower rate is that the respective properties should be intended for sale to a buyer. 3.4 According to the provisions of clause (a) of sub-section (1) of section 7 of the GST Act, 'Sale' has been included in the broader arena of 'supply' but the term 'sale' itself is not defined in the GST Act. As a result, we have explored the definition of sale from the angles of other Acts and relevant sources and have found that: Chapter III of The Transfer of Property Act, 1882 relates to "Of Sales of Immoveable Property" where section 54 thereof defines "sales" as "a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised." [emphasis added] Again, as per Black's Law Dictionary, Revised Fourth Edition (1968), "Sale" is explained as a contract between two parties, called, respectively, the "seller" (or vendor) and the "buyer," (or purchaser,) by which the former, in consideration of the payment or promise of payment of a certain price in money, transfers to the latter the title and the possessio....
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.... the applicable HSN and GST rate applicable in the instant case, it is found that GST on construction work for prospective clients, regardless of whether one charges a lump sum or periodic payments is liable to be paid and the applicable SAC (and not HSN Code) on this supply is 9954 (Construction Services) and the applicable tax rate on the supply under consideration shall be 18%. Now regarding the second question as to whether GST shall be on entire amount received or on amount after deduction as attributable to land portion i.e. 1/3 of consideration by virtue of para 2 in rate notification no.11/2017 dated 28-6-2017 as amended, we see that as per Para 2 of Notification No. 11/2017-Central Tax (Rate) dated June 28, 2017, GST shall be calculated on the value of supply, excluding the value of land which shall be calculated as one third of the total amount charged for such supply. Further, the term 'total amount' has been explained as the amount charged for transfer of land or undivided share of land, as the case may be including by way of lease or sublease. [emphasis added] The relevant Para 2 stated above is represented below: 2. In case of supply of service specifie....
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....e else classified As per entry in sl. no. 12 of Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017, Services by way of renting of residential dwelling was covered under both 'Accommodation Services' (SAC: 9963) as well as Real Estate Services (SAC: 9972) till 14.07.2024. With effect from 15.07.2024 such is treated as a supply only under Real Estate Services, where it states that - Services by way of renting of residential dwelling for use as residence except where the residential dwelling is rented to a registered person is exempted. However, for the purpose of exemption under this entry, this entry shall cover services by way of renting of residential dwelling to a registered person where, - (i) the registered person is proprietor of a proprietorship concern and rents the residential dwelling in his personal capacity for use as his own residence; and (ii) such renting is on his own account and not that of the proprietorship concern. Moreover, this entry does not apply to (i) accommodation services for students in student residences; and (ii) accommodation services provided by Hostels, Camps, Paying Guest accommodations and the....