18% GST Payable On ‘Pattadar Pass Book Cum Title Deed’, AAR Ruling Upheld: In Karnataka High Court
While upholding the ruling of the Authority of Advance Ruling (AAR) in the case of M/s. Manipal Technologies Ltd. Versus State of Karnataka (WP No. 4866/2021), the Karnataka High Court bench of Honourable Justice S. Sujatha and Justice Shivashankar Amarannavar held that 18 percent GST is payable on ‘pattadar pass book cum title deed’.
According to the facts of the case, the petitioner/assessee was in the business of printing books, magazines, calendars, diaries, bank passbooks, bank account opening forms, and other stationery items for the banking industry, educational institutions, and other customers, according to the facts of the case. On behalf of the Chief Commissioner Land Administration (CCLA), Telangana State Technology Services Limited invited bids for the secure printing and delivery of Pattadar Pass Books and Title Deed to all pattadars and land owners. The petitioner took part in the tender process and was awarded the contract as the winning bidder.
According to the agreement with CCLA, the petitioner arranged for the material needed for the printing and supply of the Pattadar Pass Book cum Title Deed. The petitioner purchased paper and had the Pattadar Pass Book cumTitle Deed printed according to the required security features and specifications.
CCLA provided the petitioner with the data/content for printing in an electronic format. The Pattadar Pass Book cum Title Deed is a document of title because it contains ownership information and will serve as a legal document of title.
For SAC 9989, the petitioner provided a printed Pattadar Pass Book cum Title Deed charging 12 percent IGST. Under Section 97 of the CGST Act, the petitioner filed an application for an advance ruling in GST ARA-01.
The petitioner requested an advance ruling on whether the “Pattadar Pass Book cum Title Deeds” printed by the petitioner for supplies to the Government of Telengana should be classified as “Document of Title” under HSN 4907 or “passbook” under HSN 4820.
The AAR determined that the Pattadar Pass Book cum Title Deed is not a document of title and is therefore classifiable under HSN 4820, attracting 18 percent GST instead of the petitioner’s 12 percent.
The document of title, according to the AAR, is the document that is registered with the authority under the Registrations Act of 1908, and the passbooks are simply reflections of that document. The pattadar passbook is not a document of title, as the actual record of title and ownership of land is kept in the Mandal Revenue Officer’s office. The passbook allows the holder to participate in a variety of government programs without having to obtain certificates from the Revenue Officer on a regular basis. The passbook and title deed in the owner’s hands are not the final documents of title.
The petitioner argued that the Pattadar Pass Book cum Title Deed was not covered by specific entries and that its classification under Tariff Entry 4907 00 90 was therefore appropriate. A Pattadar eventually used the Pattadar Pass Book cum Title Deed in relation to agricultural land. As a result, in the context of various land disputes, the classification of a passbook as a document of title or otherwise must be understood. The Pattadar Pass Book Cum Title Deed establishes ownership rights to specific financial interests or benefits. According to the tender document’s scope of work, Pattadar Pass Book cum Title Deed is a document in the form of a small bound book containing information about land owned by a person (pattadar).
The petitioner claimed that the Appellate Authority for Advance Ruling had ignored the Telengala Rights in Land and Pattadar Passbooks Act, 1971, and its accompanying Rules. To conclude the classification of such Pattadar Pass Book cum Title Deeds under HSN 4820, the AAR relied on selective reading of provisions.
The department argued that the Pattadar Pass Book cum Title Deed is only a revenue record, not a document of title, and that the entries in the revenue records cannot be used to support a declaration of title. The Pattadar Pass Book cum Title Deed was correctly classified under Chapter Head 4820 by the Authority for Advance Ruling and the Appellate Authority for Advance Ruling.
The Pattadar Pass Book cum Title Deed, according to the court, is a document in the form of a small bound book that contains the details of land owned by a person (Pattadar), a photo identity of Pattadar, and changes in ownership after the Pattadar Pass Book cum Title Deed was issued. The Revenue Department issues this Pattadar Pass Book/Title Deed in accordance with the Record of Rights Act.
The court ruled that the Pattadar Passbook cum Title Deed is not a document of title, as the petitioner claimed, and is not classifiable under Chapter Heading 4907 of the Customs Tariff Act.