Page 142 - GSTL_26th March 2020_Vol 34_Part 4

652 GST LAW TIMES [ Vol. 34
the profits through distribution of sale proceeds after development of the land by
way of construction of residential/commercial project.
2.2 In terms of the said agreement entered into, between the applicant
and the developer :
- Applicant assigned/transferred the development rights in land to
the Developer,
- The said assignment/transfer of rights in land was for the purpose
of construction of residential/commercial project on the land,
- The Developer agreed to pay consideration in the form of 45% of
the sale proceeds of the developed project,
- Further, the developer had given Rs. 3,60,00,000/- (Rs. Three Crores
Sixty Lakhs only) to the Applicant as security deposit to be refund-
ed within a month after completion of the project on the underlying
land,
2.3 In view of the above agreement, Applicant and the developer were
enjoying jointly, the rights in the land on which there was reservation, in light of
Draft Development Plan for Pune City sanctioned by the Municipal Corporation
of Pune City (PMC).
2.4 Since the applicant and the developer realized that vacat-
ing/removing reservation may not be possible, they decided to surrender their
rights in the said land. PMC gave them TDR’s/Additional FSI, as consideration
for surrendering the joint rights in land to PMC in terms of Development Control
Regulations (DCR).
2.5 Applicant and the Developer entered into a supplementary agree-
ment which included the following clauses :
- The TDR/Additional FSI to be obtained would be shared between
the Applicant and the Developer in the ratio of 73:27;
- The proportionate TDR/Additional FSI would be transferred by the
Applicant in favour of the Developer or the Applicant would trans-
fer the proportionate sale proceeds (out of the sale of
TDR/Additional FSI) to the Developer.
2.6 Thus Applicant surrendered the rights in the said land in favour of
the PMC against which PMC awarded TDR’s/Additional FSI as compensation
vide issue of Development Right Certificates (DRC’s).
2.7 Both the parties later decided to sell a part of the TDRs/Additional
FSI to Vamona Developers Pvt. Ltd. (VDPL) and share the sale proceeds in
agreed ratio. Consequently, Applicant entered into agreement/deed of assign-
ment with VDPL.
2.8 Initially at the time of the said agreement, applicant did not charge
GST and later on Applicant raised GST invoice on VDPL and requested them to
pay the GST on the said transaction along with interest. However, VDPL in-
formed applicant that that GST is not leviable on the transaction of sale of
TDR/Additional FSI.
2.9 In view of above, Applicant has applied for advance ruling and
submitted before us that Sale of TDR/Additional FSI does not amount to taxable
supply under GST being in nature of transaction of sale of land/immovable
property and covered under Clause 5 of Schedule III of CGST Act.
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