2018 (11) TMI 1347 – AUTHORITY FOR ADVANCE RULING, GOA – 2018 (19) G. S. T. L. 700 (A. A. R. – GST) – Levy of GST – One time concession fees charged by the appellant 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 on Private Investment mode on DBFOT basis providing exclusive right, license and authority to construct, operate and maintain the project.
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Ruling:- 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-Centra1 Tax (Rate), dated 28.06.2017 as amended by the Notification No. 32/2017-Centra1 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. – GOA/GAAR/4 of 2018-19 Dated:- 4-10-2018 – ASHOK V. RANE AND S.K. SINHA, MEMB
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under the provisions of GST Act, 2017 having GSTIN 30AAACG7220K1ZO. The applicant has executed Concession Agreement for Renovation/Development of their Anjuna property through Private Investment Mode, with Myrayash Hotels Pvt. Ltd, Mumbai on 9th December, 2016, given the exclusive right, license and authority to construct, operate and maintain the project for a period of 30 years extendable by further period of 30 years totalling 60 years. 3. The applicant has collected amount of ₹ 25,20,00,000/- from M/s. Myrayash Hotels Pvt. Ltd., Mumbai in the name of onetime upfront Concession Fees for a term of 60 years @ ₹ 42,00,000/- per annum for use of their Anjuna Property through Private Investment mode on DBFOT Basis (Design Build, Finance, Operate and Transfer). 4. During the hearing, it was submitted by the authorised representative of the applicant that the one-time upfront concession fee charged by the applicant, an undertaking of Government of Goa, for lease of 60
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6. The applicant submitted that the conditions for claiming exemption under this entry are as follows : (a) The exemption is for upfront payment; (b) The lease shall be for a period of 30 years or more; (c) The lease shall be for industrial plots for development of infrastructure for financial business; (d) The lease shall be granted by State Government Industrial Development Corporation or State Government undertaking by any other entity having 50% or more ownership of Central Government, State Government, Union territory; 7. They submitted that in their case, all the four conditions are satisfied which will be evident from their following submissions : (i) As per the concession agreement dated 9-12-2016 and letter No. GTDC/Hotel Properties/2012-13/3687, dated 24-12-2016 both of Goa Tourism Development Corporation Ltd., the upfront concession fees payable is ₹ 2,80,00,000/- (Rupees Twenty-Eight Crore) as specified in Clause No. 4.1.3 of the agreement and above said le
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s supplied by them. The applicant has given plot of land on lease to M/s. Myrayash Hotel Pvt. Ltd. Since the plot is used for industrial purpose, the transaction is the lease for industrial plot. (iv) The lease right has been assigned by M/s. GTDC which is a State Government undertaking. As per the notification, the lease can be granted either by Industrial Development Corporation or by the State Government undertaking. In their case, GTDC is a State Government undertaking. Therefore, the fourth condition is also satisfied. It is seen that, the applicant has signed concession agreement for DBFOT basis (Design, Build, Finance, Operate and Transfer) and received up front concession fee of ₹ 25,20,00,000/- for a period of 30 years, extendable by further period of 30 years totaling 60 years. In the instance case M/s. Goa Tourism Development Corporation, undertaking having more than 50% ownership of the State Government has leased property to M/s. Myrayash Hotel Pvt. Ltd., for develop
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entral Government, State Government, union territory . In the matter of instant case it is on record that the service provider is an undertaking of Goa Government. (b) The lease shall be for a period of 30 years or more; in the present matter the lease is made for 60 years. (c) The long term lease shall be in respect of industrial plots or plots for development of infrastructure for financial business, located in any industrial or financial business area. The said Notification or GST Act, 2017 does not define the industrial or financial business area , therefore, this bench is inclined to borrow the definition of industrial or financial business area from any other statute. As per sub-section (g) of Section 2 of the Goa Industrial Development Act, 1965 the Industrial Area means – any area declared to be an industrial area by the State Government by Notification in the Official Gazette, which is to be developed and where industries are to be accommodated . Thus, for considering any area
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ed by Notification No. 32/2017-Central Tax (Rate), dated 13-10-2017 is not available to the applicant. 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. Union of India and Others. The issue before their lordship was to decide whether GST can be levied and collected on the long term lease granted by City Industrial and Development Corporation of Maharashtra Ltd. (CIDCO) for 60 years. While dealing with the issue the Hon ble High Court has observed that lease premium amount is a consideration against supply of service and is subject to Goods and Services Tax. 11. Reliance may also be place on the decision of Hon ble High Court Allahabad in the case of Greater Noida Industrial Development Authority v. Commissioner of Customs, Central Excise [2015 (40) S.T.R. 95 (All.)], wherein the Hon ble High C
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e liable to tax under the provisions of this Act . 13. From the statute of the provisions of Section 142(10) ibid it can be easily secreted that if the contract is made in Service Tax regime and the service is provided in the GST regime or the service is in the nature of continuous supply of service, the same shall be liable to tax under the GST Act. In the instant matter, though the consideration against service is received prior to the appointed day and the contract was made in service tax regime, it cannot be said that the supply of service is completed. It can easily be understand that the consideration is received against the services to be provided for next 60 years i.e. the supply of service is in 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.
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