GST
TRT-2025-
AAR Gujarat
Date:-31-03-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 31 March 2023
Facts –
- The Applicant, M/s. Kedaram Trade Centre, is engaged in the business relating to construction of immovable properties. The applicant executed a deed with Hubtown Bus Terminal (Ahmedabad) P Ltd, for development of commercial units on plot admeasuring I 670 sq. Mtrs.
- The Applicant entered lease deed with prospective buyers for the developed units on a long-term lease basis for a period of 90 year. The lessee shall pay a one-time premium of Rs. 13.00 lacs to the applicant as a consideration for allotment of the commercial unit on long term lease period of 90 years.
Issue –
- Whether one time premium received by the applicant on allotment of completed building would be treated as taxable supply or not?
Order –
- The AAR observed that the lease of plot for 90 years by the applicant is not "sale of land" but is a lease and therefore, does not fall within the ambit of clause 5 of Schedule III of CGST Act, 2017. Hence, we conclude that this activity i.e. lease of commercial units on payment of one time lease premium and annual premium is a 'supply' falling within the ambit of section 7(1) of CGST Act,2017 read with clause 2 of Schedule II of CGST Act, 2017, which specifies that lease of a land or building as a supply.
- Moreover, schedule III, Sr. No. 5 would not apply since it relates to sale of land/building, which is not the case herein. Hence the submission made by the applicant is not tenable and is therefore rejected.
- Hence it was held that the supply of the applicant is classified under SAC 9972 and would be leviable to tax at the rate of l8%o (i.e., 9% GGST and 9% SGST) in terms of notification No. 1 I 0 I 7-CT(Rate) dated 28.6.2017.
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