Page 143 - GSTL_26th March 2020_Vol 34_Part 4

2020 ] IN RE : VILAS CHANDANMAL GANDHI 653
2.9.1 Applicant has reproduced the definition of the term “goods” as
defined in the CGST Act, 2017 and has submitted that the said definition in-
cludes the words ‘movable property’ which have not been defined in the CGST
Act. To understand the definition of the term ‘movable property’, Applicant has
cited Section 3(36) of the General Clauses Act, 1897, Section 2(9) of the Registra-
tion Act, 1908 and Section 22 of Indian Penal Code, 1860 and sub-section (102) of
Section 2 of CGST Act and has arrived at the conclusion that movable properties
are covered in the definition of goods, and other than goods are covered within
the ambit of services.
2.9.2 The applicant has further referred to various other legislations to
explain the term, ‘immovable property’, like, Section 3(4) of Bombay Land Reve-
nue Code, 1879, Section 2(z) of the Real Estate (Regulation and Development)
Act, 2016, etc. and has arrived at the conclusion that immovable property in-
cludes land and land includes the benefits arising out of land. Referring to vari-
ous case laws in support of their arguments, applicant submitted that
TDR/Additional FSI in the present case are land being benefits arising out of
land. Hence according to the Applicant, the present transaction can be said to be
a transaction of sale of land and covered under Schedule III of the CGST Act and
can neither be treated as supply of goods nor supply of services to be taxable un-
der GST.
3. The applicant has also made alternate submissions stating that their
supply may be taxable under GST, as below.
3.1 The scope of the supply is very wide and it encompasses most of
the commercial transaction undertaken during the course of business and involv-
ing consideration such as sale, barter, transfer etc.
3.2 The term service is wide enough and covers everything other than
goods, money and securities. Hence, a view can be formed that supply of
TDR/Additional FSI will be considered as supply of service.
3.3 Notification No. 4/2018-Central Tax (Rate), dated 25 January, 2018
provides for the incidence of taxable event under CGST, in respect of transfer of
development rights for construction and although the said notification has been
issued in the context of joint development agreement, it appears that the Gov-
ernment intended to tax the transaction of transfer of TDR/Additional FSI be-
cause even in the joint development agreement, there is transfer of development
rights. Hence it appears that Government intended to tax all the transactions of
TDR’s/Additional FSI under GST.
3.4 Notification No. 4/2019-Central Tax (Rate), dated 29 March, 2019,
has made an amendment in Notification No. 12/2017-Central Tax (Rate) where-
by, Service by way of transfer of development rights/Additional FSI were made
exempt subject to condition that promoter shall be liable to pay tax at the appli-
cable rate, on reverse charge basis, on such proportion of value of development
rights, as is attributable to the residential apartments, which remain unbooked
on the date of issuance of completion certificate.
3.5 Further, reference is made to Notification No. 5/2019-C.T. (Rate),
dated 29-3-2019 wherein by way of amendment in Notification No. 13/2017-C.T.
(Rate), Service by way of transfer of development rights/Additional FSI by any
person to promoter were made taxable under reverse charge. Also, reference has
been made to Notification No. 6/2019-C.T. (Rate), dated 29-3-2019 prescribes that
in case of a promoter who receives development rights against consideration in
GST LAW TIMES  26th March 2020  239