If you face any problem in using website, please do mail us your concern at team@gstcornor.com or call us at +91-8989077616.   

GST News Details

‘GST on Reallocation of GIDC Land not Legal’

Ahmedabad: Several companies are remonstrating after receiving goods and services tax (GST) notices for tax on considerations received for assignment of leasehold land to other entities.

The Gujarat Chamber of Commerce and Industry (GCCI) has written to chief minister Bhupendra Patel and Union finance minister Nirmala Sitharaman, saying that GIDC plots are leasehold land and are not goods or services.

GCCI president Pathik Patwari said, In many cases industrial land is originally allotted to one entity by Gujarat Industrial Development Corporation (GIDC)  and subsequently at the request of the entity is reallocated and to another entity by GIDC. In such cases, deeds of assignment of leasehold land are executed pursuant to permission from GIDC. Many MSME companies have received permission from GIDC. Many MSME companies have received notices from the authorities under the Goods and Services Tax Act, 2017 for imposition of tax on the consideration received. Imposing tax on considerations relating to assignment of leasehold land is bad and illegal.”

He said that tax under the GST Act is levied on supply of goods or services or both. “The term ‘goods’ as defined in Section 2(52) of the GST Act means every kind of movable property other than money and securities. It can be nobody’s case that land is movable property. Thus, there is no question of the transaction of sale of leasehold land being treated as supply of ‘goods’ under the GST Act. In such transactions there is no service element at all. There is only reallocation of land by GIDC which is not a ‘service’ and hence tax is not leviable,” he wrote in his letter to CM and the Union finance minister.