In Re: M\/s. Goa Tourism Development Corporation Ltd
GST
2018 (11) TMI 1347 – AUTHORITY FOR ADVANCE RULING, GOA – 2018 (19) G. S. T. L. 700 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, GOA – AAR
Dated:- 4-10-2018
GOA\/GAAR\/4 of 2018-19
GST
ASHOK V. RANE AND S.K. SINHA, MEMBER
\nPROCEEDING
\n(Under Section 98 of the Goa Goods and Services Tax, Act 2017)
\nThe present application has been filed under Section 97 of the Goa Goods and Services Tax Act, 2017 and the Central Goods and Services Tax, Act, 2017 (hereinafter referred to as the SGST Act and CGST Act) by M\/s. Goa Tourism Development Corporation Ltd., 3rd Floor, Paryatan Bhavan, Patto, Panaji – Goa (hereinafter referred to as the applicant) seeking an Advance Ruling in respect of the following question : “Whether GST is applicable on One Time Concession Fees Charged by the applicant 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 de<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n te Investment mode on DBFOT Basis (Design Build, Finance, Operate and Transfer). = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ions are satisfied which will be evident from their following submissions : = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n 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. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ndertaking 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 as industrial or financial business area it is necessary that the area must be declared as industrial or financial business are<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n 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. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n 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. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" In Re: M\/s. Goa Tourism Development Corporation LtdGST2018 (11) TMI 1347 – AUTHORITY FOR ADVANCE RULING, GOA – 2018 (19) G. S. T. L. 700 (A. A. R. – GST)AUTHORITY FOR ADVANCE RULING, GOA – AARDated:- 4-10-2018GOA\/GAAR\/4 of 2018-19 GSTASHOK V. RANE AND S.K. SINHA, MEMBER PROCEEDING (Under Section 98 of the Goa Goods and … Continue reading “In Re: M\/s. Goa Tourism Development Corporation Ltd”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-15187","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15187","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15187"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15187\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15187"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15187"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15187"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n4. 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 years granted to M\/s. Myrayash Hotels Pvt. Ltd., Mumbai is exempted from payment of GST under Sr. No. 41 of Notification No. 12\/2017-C.T. (Rate), 28-6-2017 as amended by Notification No. 32\/2017-C.T. (Rate), dated 13-10-2017. The Entry No. 41 reads as follows :
\n “Upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable in respect of service by way of granting of long term lease of thirty years, or more) of industrial plots for development of infrastructure for financial business, provided by the State Government Industrial Development Corporations or Undertakings or by any other entity having 50 percent or more ownership of Central Governme<\/p>\n
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\n(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 Rs. 2,80,00,000\/- (Rupees Twenty-Eight Crore) as specified in Clause No. 4.1.3 of the agreement and above said letter.
\n Therefore, the first condition that the exemption is for upfront concession fees, is satisfied, in fact, the invoices also give the description as Up-Front Concession Fees with respect to Anjuna Property.
\n(ii) The period of lease is 60 years as mentioned in Clause No. 3.1.1 of the agreement with Goa Tourism Development Corporation Ltd. Therefore, the period of lease is more than 30 years as required under Entry No. 41 of the notification.
\n(iii) The word 'industry' has been<\/p>\n
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\n 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 Rs. 25,20,00,000\/- for a period of 30 years, extendable by further period of 30 years totaling 60 years.
\n 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 development of infrastructure for financial business on Private Investment mode on DBFOT basis (Design, Build, Finance, Operate and Transfe<\/p>\n
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\n11. 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 Court while considering the demand, though not arising out of GST, but under the Finance Act, 1994 in relation to the services<\/p>\n
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\nAdvance Ruling under Section 98 of the CGST\/GGST Act, 2017
\n14. 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-Central Tax (Rate), dated 28-6-2017 as amended by the Notification No. 32\/2017-C<\/p>\n
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