In re Maharashtra Metro Rail Corporation Ltd. (GST AAR Maharashtra)
Maharashtra Metro Rail Corporation Ltd. (Maha-Metro), a government entity with equal equity from the central and state governments, issued a tender for the construction and licensing of a commercial space adjacent to the Airport Metro Station in Nagpur. Abhijit Realtors and Infraventures Pvt. Ltd. won the bid, and a license agreement was signed in July 2022. The agreement mandates the construction of a bare shell commercial structure, including RCC works, within 24 months. The license period is set for 60 years. Maha-Metro receives an upfront premium of Rs. 10.26 crore and an annual license fee based on the built-up area. The key issue addressed is whether Maha-Metro qualifies for GST exemption under Sr. No. 41 of Notification No. 12/2017-Central Tax (Rate). The exemption applies to government entities leasing plots for infrastructure development. Given Maha-Metro’s full government ownership and the long-term license agreement, it qualifies under the exemption criteria. However, since the agreement pertains to a constructed structure rather than a plot, it does not meet the exemption conditions. Consequently, an 18% GST rate applies to the leasing services provided to Abhijit Realtors.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, MAHARASHTRA
(Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
The present application has been filed under Section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act” respectively] by M/s. Maharashtra Metro Rail Corporation Ltd. the applicant, seeking an advance ruling in respect of the following questions.
1. Whether the Applicant is eligible for exemption under Sr. No. 41 of Notification no. 12/2017-Central Tax (rate) dated 28 June 2017 (‘exemption notification’)?
2. If not, whether 18% GST Will be applicable on the leasing services provided to M/s. Abhijit Realtors and infra ventures Pvt. Ltd. (‘Service recipient’)?
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression ‘GST Act’ would mean CGST Act and MGST Act.
