Page 57 - GSTL_20th August 2020_Vol 39_Part 3

2020 ] STARCITY ENTERTAINMENT PVT. LTD. v. COMMISSIONER OF S.T., MUMBAI 271
is given for the yearly rent to be paid. Premium is also part of the
lease money. Therefore, the entire transaction both premium and rent
are amenable to Service Tax and Service Tax will have to be paid on
the same.
6. Another submission has been made by Mr. Bhattacharji, that this
premium includes capital investment. We do not understand what is
the meaning of this argument? It is true that the payment of premium
will be treated as a capital investment but this does not mean that it is
not the consideration for the lease”.
16. In view of the legal position as explained above by the Hon’ble Tripu-
ra High Court, we find that the appellants are liable to Service Tax on the
premium received on leasing of land for the periods of less than 30 years.
xxxx
27. In view of the above discussion and analysis, the various points of the
appeals filed by the appellant are decided in following terms :-
(a) The appellants are liable to Service Tax on the activity of leas-
ing of land, for use in the furtherance of commerce or busi-
ness, from 1-7-2010. However, considerations received as
lump sum upfront payment in respect of lease of land for a
period of 30 years and above shall not be liable to such tax;
(b) The appellants are liable to pay Service Tax on retention
charges, restoration charges, unauthorized construction
charges/Regularization charges and transfer charges relating
to lease land under the tax category of renting of immovable
property services for the period 1-7-2010 onwards;
(c) The appellants are liable to Service Tax under management,
maintenance and repair services in respect of charges collected
from allottees with reference to provision of various services
other than management, maintenance of roads;
(d) The demands wherever raised invoking extended period of
limitation shall be restricted to normal period;
(e) The penalties imposed on the appellants are set aside and
(f) Subject to verification of the fulfilment of condition with doc-
umentary evidences, the provisions of Section 67(2) shall be
available to the appellant to calculate the quantum of Service
Tax liability payable by them.’
5. The issue that arises for consideration is the nature of the transaction
entered into by the appellant herein with M/s. Movie Time in 2007; it is common
ground that consideration for sale would not be taxable under Section
65(105)(zzzz) of Finance Act, 1994. It is seen that the decisions cited by both sides
pertain to transactions entered into by specially constituted entities of State Gov-
ernments for industrial development and, considering the sensitivity of land ac-
quisition for such purpose, the design of transfer is contrived to ascertain sub-
stantive compliance with the conditions of such transfer before possession and
ownership is completely handed over. The ‘premium’ collected by these entities
was the subject matter of dispute in the decisions cited and, though rendering
guidance on principles, cannot be said to apply to the peculiarities of the im-
pugned transaction. We shall revert to those after examining the present dispute.
GST LAW TIMES  20th August 2020  57