Prayagraj, 16 October: The Allahabad High Court held that the premium for plots allotted to hospitals under lease for a period of thirty years or more falls within the definition of amount paid in advance and is exempt from Goods and Services Tax (GST).
This order has been given by the bench of Justices Soumitra Dayal Singh and Vinod Diwakar on the petition filed by M/s Ram Kamal Healthcare Pvt. Ltd.
In the case, the petitioner had challenged the letter issued by the consultant of Yamuna Expressway Industrial Development Authority (YEIDA), in which the petitioner was required to deposit GST at the rate of 18 percent on the premium of Rs.
YEIDA had imposed a fee of Rs 3.80 crore against the four thousand square meter institutional plot H-2, Sector 22-A allotted to the petitioner.
It was argued on behalf of the petitioner that exemption was given by the Central Government under Section 11 of the Goods and Services Tax Act 2017 vide Notification No. 12/2017. Apart from this, no demand of tax was made by the revenue authorities on Yeda or the petitioner. Because, YEIDA had applied before the authority for advance ruling.
The said order was never challenged by the Revenue. Therefore it was finalized. Furthermore, it was argued that under Article 12 of the Indian Constitution, YEDDA is bound to act impartially and fairly. The demand letter is completely illegal. Because, there is no legal order to demand any GST on the premium paid by the petitioner to YEIDA for allotment of institutional plot for setting up the hospital.
Government advocate said that no demand for tax has been made in this case. The petitioner has failed to fulfill the conditions. The court said that the allotment was made in 2015. The GST provisions were applicable to installments paid on or after July 1, 2017.
Further, the Central Government, through notifications, has given special exemption on the amount paid in advance in respect of the service of grant of long term lease of 30 years or more of industrial plots by development corporations-undertakings etc.
