Latest GST Judgments

For Full Access To All Latest Judgments on GST
Click Here To Subscribe Now
Take a tour of our GST Library

The one time premium received by the applicant on allotment of completed commercial units/building is taxable supply in terms of section 7 of the CGST/GGST Act, 2017 and taxable @18% GST under SAC 9972.

Advance Ruling - Taxable supply- Government of Gujarat, acting through Gujarat State Road Transport Corporation [for short —'GSRTC’] decided to develop the area admeasuring 58370 sq. mtrs. of TP scheme no. 2 of Kankaria through private sector participant on commercial build, operate and transfer basis.

The applicant has undertaken development of the project as per the approved plans and has developed commercial unit. Upon duly completing the construction and development of the project the Ahmedabad Municipal Corporation has issued the BU permission on 25.5.2022.

On expiry of the lease period, the lease deed shall come to an end and the lessee/sub-lessee shall without any demur or delay remove all the goods and other belongings and hand over the leased premises to the lessor or its nominee.

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. Additionally, the lessee shall pay to the lessor ie GSRTC, advance annual lease rental of Re 1/- per square metre for the built up area of the leased premises for the first three years and thereafter the same shall be enhanced by 200% for every subsequent block of 10 years or part thereof.

In view of the foregoing, the applicant has filed this application seeking advance ruling on the below mentioned questions viz

(i) Whether one time premium received by the applicant on allotment of completed building would be treated as taxable supply or not?

(ii) In case the supply is treated as taxable supply, what will be the applicable rate of tax.

Authority for Advance Ruling, Gujarat held that :- 

(i) The one time premium received by the applicant on allotment of completed commercial units/building is taxable supply in terms of section 7 of the CGST/GGST Act, 2017.

(ii) The supply of the applicant is classified under SAC 9972 and would be leviable to tax at the rate of 18% (i.e. 9% CGST and 9% SGST) in terms of notification No. 11/2017-CT(Rate) dated 28.6.2017.

Professional services available Audit Management
Tax Lok English Viedo
Tax Lok Hindi Viedo
Check Your Tax Knowledge
Youtube
HR Consulting services

FOR FREE CONDUCTED TOUR OF OUR ON-LINE LIBRARIES WITH OUR REPRESENTATIVE-- CLICK HERE

FOR ANY SUPPORT ON GST/INCOME TAX

Do You Want To Take FREE DEMO Of Our GST/Income Tax Library.