Zaver Shankarlal Bhanushali, In re
Decision: Against the assessee
Supply-Amount received by tenant of building towards alternate accomodation-Taxability
Facts:
Applicant sought Ruling on the question as to whether GST applicable on the compensation for alternate accomodation to be paid to the tenant of the old building by the developer/owner and on the compensation for alternate accommodation/damages for delayed handover of possession of the new premises to be paid to the tenant of the old building by the developer/owner.
Held:
The AAR held that the act of vacating premises for facilitating the developer implies that the applicant has agreed to do an act and such act, of vacating the premises, by the applicant, squarely falls under clause 5(e) of the Schedule II and therefore the amounts received by the applicant for having agreed to do such an act, would attract tax liability. The AAR further observed that the receipt of amounts towards alternate accommodation or delayed possession of premises would be receipt of amounts for doing an act i.e. vacating the premises for redevelopment as well as tolerating the construction cum redevelopment work till possession of new redeveloped premises as per agreement and further for tolerating an act i.e the act of not having completed the redevelopment work within 36 months. In view thereof, the same would definitely be a ‘supply’ under the GST Act.
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