• twitter-icon
Unlimited Tax Return Filing


Guj AAR: 99 Years Lease of Commercial Land or Plot Attracts GST

GST Applicable on Lease of Commercial Land or Plot

The Gujarat authority for advance ruling stated that the 99-year lease and the annual premium on the commercial plot land are subjected to central GST as per the ruling.

“…lease of the plot for 99 years by the applicant is not a sale of land but is a lease of plot/land and therefore does not get covered under clause 5 of Schedule III of CGST Act, 2017. Hence, we conclude that this activity i.e., lease of plot and payment of one-time lease premium/salami and an annual premium paid by the applicant for the lease of commercial plot/land is a ‘supply’ and covered under Section 7 (1) of CGST Act, 2017…,”

Under the section, it is defined as all forms of supply of Goods and Services In GST model Law separate provisions have been prescribed to determine the time of supply of goods and services. Liability for GST (Goods and Services Tax) will. Read more. It consists of exchange, licence, rental, sale, lease etc to be proposed or agreed or admitted to discovering for compensation by the person in promoting the business.

The Gujarat authorities need to explain that the long duration lease premium paid by the associated firm to the Ahmedabad Urban Development Authority is applicable to pay tax in the GST act.

“Sale of land does not attract GST even as states impose stamp duty and registration fees on such transactions,” “There is a strong view in the industry that a long term lease (of say 99 years) is akin to the sale of immovable property and hence no GST should be payable. Alternatively, the tax authorities have taken a stand that as GST law does not define the term ‘lease’ nor qualifies the same to be only for a certain duration, all leases irrespective of the term are exigible to GST,”

“With this ruling and recent trend of rulings, it appears that authorities are likely to demand GST on long-term leases, upfront premiums, salami, etc. and thus, this may result in the additional tax burden on the lessee,” announced by the vice president of HR firm.

Disclaimer:- "All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check."

Published by Arpit Kulshrestha
Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous. View more posts
SAGINFOTECH PRODUCTS

Join the Conversation

2 thoughts on "Guj AAR: 99 Years Lease of Commercial Land or Plot Attracts GST"

  1. Very nice report. Can you please send the copy of the AAR and your views whether it will be reversed on further appeal.

    regards…

Your email address will not be published. Required fields are marked *

Follow Us on Google News

Google News

Latest Posts

New Offer for Professionals

Super Tax Offer

Upto 20% Off
Tax, ROC/MCA, XBRL, Payroll, Online GST

Limited Offer, Hurry

Big Offer for Tax Experts

Upto 20% Discount on Tax Software

    Select Product*

    Current GST Due Dates