Andhra Pradesh Authority of Advance Ruling (AAR) recently held that Andhra Pradesh Industrial Infrastructure Corporation Limited liable to pay Goods and Service Tax on interest received on annual installments .
The applicant Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC) is a government undertaking company. They allotted the land to the SC/ST/BC entrepreneurs duly collecting certain percentage of the land cost from the entrepreneurs at the time of allotment of land and the sale agreement for the same will be executed on satisfaction of certain allotment conditions by the entrepreneur, with regard to the balance amount of the land cost, the same will be collected from the entrepreneur in annual installments along with interest duly providing moratorium period.
The applicant sought the advance ruling on the issue of whether the interest amount receivable on the annual instalments fixed by the applicant is liable to GST or not.
Vishnu Priya Dumpa representing the applicant submitted that section 15(2)(d) of the Central Goods and Service Act 2017 is not applicable to this case as sale of land amounts to neither supply nor supply of service as per schedule III of the Central Goods and Service Tax Act 2017.
The authority observed that applicant contract/ agreement that executed beneficiaries shall be treated as supply of service as per 5 of Schedule II, sale of between APIIC and its para 5(e) of Schedule -II, of Central Goods and Service Act 2017 .Therefore It was a supply of service .
After considering the averments the authority consisting member of D. Ramesh (Commissioner of State Tax ) and RV Prathamesh Bhanuuled (Joint commissioner of central Tax) ruled that, “APIIC had given a facility to the beneficiaries, by extending the service of fixation of annual installments with an interest at 160% per annual for delayed payment of 75% of total consideration over a period of time, In such a case, the interest on the credit facility allowed by the applicant is part of the value of taxable supply and shall be liable to GST.”
Further the authority observed that applicant contract/ agreement that was executed beneficiaries shall be treated as supply of service as per 5 of Schedule II, sale of between APIIC and its para 5(e) of Schedule -II, of Central Goods and Service Act 2017 .Therefore It was a supply of service
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
