Case Details: A.T.S. Township Pvt. Ltd. vs. Commissioner of Central GST, Noida (2025) 34 Centax 412 (Tri.-All)
Judiciary and Counsel Details
- S/Shri P.K. Choudhary, Member (J) & Sanjiv Srivastava, Member (T)
- Shri Kapil Vaish, Chartered Accountant, for the Appellant.
- Shri Manish Raj, Authorised Representative, for the Respondent.
Facts of the Case
The Appellant-assessee, a builder, had constructed a residential complex on land taken on lease from NOIDA and, under the agreement, had paid one-time lease rent equivalent to 11% of the land premium to NOIDA, as reflected in the ledger voucher and challan. The assessee recovered this amount from subsequent flat buyers, and the sale deed, sub-lease deed executed through a tripartite arrangement among NOIDA (lessor), the assessee (lessee), and the flat buyers (sub-lessee), as well as provisional allotment letters, indicated that the one-time lease rent earlier paid by the assessee was apportioned towards the liability of flat buyers and reimbursed to the assessee. The assessee submitted that the lease rent collected from flat buyers was not consideration for any service rendered by it, but merely a reimbursable charge payable to NOIDA and therefore not includible in the gross value for valuation of Construction of Residential Complex service. The matter was accordingly placed before the CESTAT).
CESTAT Held
The CESTAT held that the valuation provisions under the Finance Act, 1994 permit inclusion only of consideration attributable to the taxable service and do not allow addition of amounts recovered purely as reimbursement of payments owed to a third party. The Tribunal applied the ratio of the Delhi High Court in Intercontinental Consultants and Technocrats Pvt. Ltd. [2013 (29) S.T.R. 9 (Del.)] , upheld by the Hon’ble Supreme Court in [2018 (10) G.S.T.L. 401 (S.C.)], and followed its own decision in Supertech Realtors Pvt. Ltd., to hold that the lease rent recovered from flat buyers and payable to NOIDA constituted reimbursable expenses and could not be added to the assessable value. It observed that the documents on record established that the lease rent was the liability of the flat buyers and that the assessee merely facilitated its onward payment to NOIDA without rendering any additional service in respect of such amount. The CESTAT accordingly held that the additions made to the gross value were unsustainable and allowed the appeal.
List of Cases Cited
- Builders Association of Navi Mumbai v. Union of India — 2018 (12) G.S.T.L. 232 (Bom.) — Referred [Para 23]
- Commissioner v. Bhayana Builders Pvt. Ltd. — 2018 (10) G.S.T.L. 118 (S.C.) — Referred [Para 41]
- Greater Noida Industrial Development Authority v. Commissioner — 2015 (40) S.T.R. 95 (All.) — Referred [Para 22]
- Intercontinental Consultants & Technocrats Pvt. Ltd. v. Union of India — 2013 (29) S.T.R. 9 (Del.) — Referred [Paras 3, 10, 15, 20, 30, 39]
- KDP Infrastructure Pvt. Ltd. v. Commissioner — 2019 (22) G.S.T.L. 450 (Tri.-All.) — Referred [Paras 3, 8, 15, 21]
- Supertech Realtors Pvt. Ltd. v. Commissioner — Final Order No. 70103/2024, dated 29-2-2024 by CESTAT, Allahabad — Referred [Paras 3, 9, 15, 24, 25, 42]
- Union of India v. Intercontinental Consultants & Technocrats Pvt. Ltd. — 2018 (10) G.S.T.L. 401 (S.C.) — Referred [Paras 2.2, 3, 10.1, 10.2, 11, 20, 30, 40]
List of Departmental Clarification Cited
- C.B.I. & C. Letter F.No. B1/4/2006-TRU, dated 19-4-2006 [Para 18]
- C.B.I. & C. Letter D.O.F. No. 334/1/2010-TRU, dated 26-2-2010 [Paras 21, 25]
