The Maharashtra Authority for Advance Ruling ( AAR ) , held that no ruling can be given on past and completed supply, thereby ruling against United Breweries Limited, the applicant.
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [CGST Act and MGST Actrespectively] by M/s. United Breweries Limited, the applicant, seeking an advance ruling in respect of the following question as to whether assignment/transfer of leasehold rights in land and structures standing there by the applicant to M/s. Greenscape IT Park LLP would qualify as ‘supply’ and liable to GST and if so, then under which section of GST Act.
The Applicant, engaged in the manufacture of Beer and bottled drinking water had a lease hold land which was leased out to them by the Maharashtra Industrial Development Corporation (MIDC). The applicant was holding this long term leased property, after obtaining necessary approvals, permissions, Commencement certificate from MIDC/NMMC and concerned Authorities, have constructed Industrial structures thereon as per the approved building Plans.
The applicant had also obtained building Completion Certificate from MIDC. The applicant executed “Deed of Assignment Cum Transfer” by virtue of which applicant have agreed to transfer its rights over the land and structures standing thereon to M/s. Greenscape IT Park LLP for an un-expired lease period viz. more than 30 years.
The Counsel for the applicant contended that renting of immovable property is one such instance that is as a supply of service by expressly including it as a supply of service by the Act. In the absence of such inclusion, since assignment of lease amounts to transfer of a right to enjoy immoveable property and amounts to creation of an interest in the property, it is outside the scope of taxation of under the Act.
As per Section 95 of CGST, there are two conditions to be fulfilled for making an advance ruling application: firstly, the question asked should be in relation to supply undertaken by the applicant and secondly the question should be in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.
A Two Member Bench of the Authority comprising M Rammohan Rao and TR Ramnani, ruled that “Based on the submissions made by the applicant and hearings conducted, the subject application is rejected as being non-maintainable as per Section 95 of the CGST Act, 2017 because the questions raised by the applicant are in respect of past and completed supply as on the date of the application and not supply, which is being undertaken/proposed to be undertaken.”
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