Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – Dated:- 10-12-2018 Last Replied Date:- 10-12-2018 – In re Goa Tourism Development Corporation Limited – 2018 (11) TMI 1347 – AUTHORITY FOR ADVANCE RULING, GOA, the applicant is a Government company and registered under the provisions of GST laws. The applicant has executed concession agreement for renovation/development of their Anjuna property through private investment mode with Myrayash Hotels Private Limited, Mumbai on 09.12.2016. The agreement gives the right, licence and authority to construct, operate and maintain the project for a period of 30 years extendable by further period of 30 years totaling 60 years. The applicant collected one time upfront concession fees from Myrayash Hotels Private Limited @ ₹ 42,00,000 lakhs per year. The total fee is ₹ 25.2 crores was collected by the applicant from the said company. The said company may use the property of the applicant on the basis of Design, build, finance,
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by Notification No. 32/2017-CTR, dated 13.10.2017. The conditions for claiming exemption under this Notification are as follows- The exemption is for upfront payment. The lease shall be for a period of 30 years or more. The lease shall be for industrial development of infrastructure for financial business. The lease shall be granted by State Government Development Corporation or State Government undertaking by any other entity having 50% or more ownership of Central Government, State Government or Union territory Since all the above four conditions are satisfied the applicant is eligible for exemption from GST in respect of one time upfront concession fee received from the hotel. The Authority observed that the four conditions in the Notification are satisfied which are arrived at as follows- As specified in clause 4.1.3. of the lease agreement the upfront concession fee to the extent of ₹ 28 crores is payable to the applicant – The first condition of exemption is fulfilled sinc
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it is on record that- The service provider is an undertaking of Goa Government. The lease is made for 60 years. The long term lease shall be in respect of industrial plots or plots for development of infrastructure for financial businesses located in any industrial or financial business area . Either the Act or the concerned Notification does not define the expression industrial or financial business area . Therefore the Authority got the definition of the said expression from the Goa Industrial Development Act, 1965 . Section 2(g) of the said Act defines the expression industrial area as any area to be declared as industrial area by the State Government by Notification in the Official Gazette, which is to be developed and where industries are to be accommodated. The Authority considered that an area cannot be treated as industrial or financial business area merely on the ground that the area is being used for the purpose of industry/finance. The approval/declaration from the State Go
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whether GST can be levied and collected on the long term lease granted by Industrial and Development Corporation of MaharashtraLimited for 60 years.The High Court has observed the lease premium amount is a consideration and subject to GST. Section 142(10) of Central Goods and Services Tax Act, 2017 provides that if the contract is made in service tax regime and the service is provided in GST regime or the service is in nature of continuous supply of service, the same is liable to tax under GST Act. In the present case the lease agreement is made prior to GST regime and the service is to be provided for the next 60 years and it is a continuous supply of service. The Authority ruled that the same is liable to be taxed under GST. – Reply By Ganeshan Kalyani – The Reply = The industry to set up need permission from an appropriate authority who would be studying and considering various conditions. One of the condition would be the area in which the factory to be set up. I mean to say Govt w
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