The problem of GST on the leased land affecting the Ministry of Micro, Small & Medium Enterprises across India, it is been requested by the Chamber of Small Industries Association (COSIA) to the government to think again about the same issue.
President of COSIA Sandeep Parekh stated that the GST department has laid the industry into fear by sending a summons and has begun an investigation into the concern that how many transfers of leased lands have been initiated in the Maharashtra Industrial Development Corporation area since July 2017.
Post five years the council resembles taking a stand beneath the provision of supply of service on the transfer of leased land from one client to another other and therefore 18% would get imposed on the transactions, but there is an exemption of MIDC. it will alert MSMEs who had already sold their plots since July 2017 and indeed for the subsequent transactions, if the same would arrive in real.
Within the FM Sitharaman and the GST council, this case is been concerned by the COSIA, a pan-India MSME apex body. For raising the issue with the GST council it has been appealed to the Maharashtra deputy CM Fadnavis, who is also a state finance minister.
Under GST, an exemption is there on the initial lease of land from MIDC to the industry. But for the subsequent assignment of leasehold rights, there is no certain exemption given. It is a larger amount and the MSME registration proceeds to get under stress.
It is the problem that is faced all over India and currently, in the state of Maharashtra alone there are thousands of units that do not pay the GST on the work of the leasehold rights of the land which is opted on lease from MIDC under the “assignment of leasehold rights in the land” is similar to the “sale of land” and these transactions that comes under Schedule III of the CGST on which GST Act does not levy.
Under the land sale, all secure the stamp duty and indeed filed the income tax on the short-term and long-term gains acknowledging as deemed ownership and the premium would be paid to the MIDC in concern of transferring the lease.
Various MSME has faced bigger losses in the covid duration and indeed there are certain firms who forced to shut their operations and sell their plots in order to pay their liabilities.
The associations from all across India beneath a single platform have been drawn by the COSIA and before the respective state and central government, they are taking their cases.
Read also: Easy Guide to MSME Form 1 with Filing Procedure & Due Dates
We have written to all the concerned departments and requested to amend/clarify the GST rule for the long-term lease with retrospective effect and give relief to the thousands of MSMEs from all over India by considering it in schedule III,
AS PER CL 12 OF NN 12/2017 CAN A NEW COMPANY BE FORMED TO TAKE AND SUBLET ON LEASE ONLY RESIDENTIAL APARTMENTS WITHOUT REQUIRING REGISTRATION UNDER GST ENACTMENT ?
KINDLY REPLY
WITH OBLIGATION -REGARDS
“Please consult GST practitioner for the same”