CIDCO made a demand of GST on lease premium from the allottee which was contested by the allottee by way of writ petition. The Court held that the “demand of GST cannot be said to be vitiated by any error of law apparent on the face of the record”. Some of the reasons are:
(i) (a) CIDCO is a “person” as defined in GST law and in the course or furtherance of its “business” it disposes of land by leasing them out for a consideration.
(b) Under Schedule II (item 2), section 7, any “lease” of land is a supply of service.
(c) The premium is the consideration paid for the lease which is the measure of tax.
(ii) Under section 7(2)(b), activities undertaken by Central Government, State Government or local authority in their status as “public authorities” is neither a supply of goods nor supply of services only if the Government issues a notification to that effect. In the absence of any such notification, merely going by the status of CIDCO, it cannot be held that lease premium is not liable to GST.
[Builders Association of Navi Mumbai vs. Union of India (2018) 12 GSTL 232 (Bom.)]