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Activity of agreeing to grant rights for shared access of the pathway is an “act of agreeing to tolerate an act” and is classifiable under SAC 999794 under “other miscellaneous services/Agreeing to tolerate an act' and is taxable @18% as rightly held by the Lower Authority.

Classification of service- The issue is on this activity of grant of shared access for a consideration by the appellant. It is the contention of the appellant that the right to pathway is an easement of the land owner, an appurtenant to the residential dwelling; not in the genre of lease, tenancy, etc which are declared as ‘services' in Schedule-II to the Act; easement is ancillary to sale of land in the composite supply of land and therefore the easement in the case at hand is not taxable under GST. The Lower Authority has found that the right granted to the land owner by the appellant is one where the appellant also holds the right in the pathway and is not an activity of 'Lease' defined under Section 105 of Transfer of Property Act 1882 and therefore, the activity is not renting or leasing of property classifiable under SAC 9972 but the activity is one of 'Agreeing to tolerate an act' classifiable under SAC 9997 94 and held as liable to GST. The appellant is a company and had acquired the land for its business purpose; The land once acquired for business purposes becomes a non-residential property. The Landowner has been granted the right of shared access enabling the land owner access to the road. This right to use the pathway being common to both the appellant and the landowner, the pathway cannot be termed as land appurtenant to the residential dwelling as claimed by the appellant. Held that- we hold that the grant of shared access for a consideration by the appellant is classifiable under SAC 9997 as rightly held by the Lower Authority and liable to GST. The subject appeal is disposed of accordingly.
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