No GST exemption on sub-leasing of ‘Industrial Development Corporation land’ by SPV developer to its members: Guj. AAR

  • Blog|News|GST & Customs|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 17 December, 2021

Recent Posts

Blog, News, Company Law

[Opinion] Company & Its Directors Penalized for Using Private Placement Funds in Existing Account Before Filing Return of Allotment

Blog, News, Company Law

SEBI Amends Buy-Back Regulations | Excludes Shares Held by Non-Participating Promoters from Entitlement Ratio

Latest from Taxmann

Gujarat Goods and Services Tax Act 2017 - Scope of Supply

Case Details: Authority for Advance Rulings, Gujarat Gujarat Hira Bourse, In re - [2021] 133 taxmann.com 77 (AAR - GUJARAT)

Judiciary and Counsel Details

    • Sanjay Saxena and Arun Richard, Member
    • Hardik Modh, Nitin Gheewale and Arjun Akruwala for the Applicant.

Facts of the Case

The applicant was engaged in development of Gems and Jewellery Park. It executed a lease deed with state industrial development corporation for 99 years for acquisition of land. The land would be further sub-leased to its members (industrial units). It would receive contribution from its members who were well known Gem and Jewellery exporters, which would be used towards Infrastructure cost of facilities for establishment of Bourse for promotion of export of Diamond, Gems, Pearl and Jewellery. It filed an application for advance ruling to determine taxability of contribution received from sub-leasing activity.

AAR Held

The Authority for Advance Ruling observed that in the instant case the applicant was engaged in leasing services. As per Entry No. 41(Heading 9972) of Notification No. 12/2017- Central Tax(Rate) dated 28-6-2017, exemption is provided on one time upfront amount (called as premium, salami, cost, price, development charges or by any other name) leviable in respect of the service, by way of granting long term (thirty years, or more) lease of industrial plots, provided by the State Government Industrial Development Corporations or Undertakings to industrial units. In the instant case, the applicant acquired the lease of the plot from State Government Industrial Development Corporation but further sub-leased it to industrial units. Therefore, consideration paid by industrial units to the applicant would not be exempt and liable to GST.

Case Review

List of Cases Referred to

Income Tax Returns 2021-22

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

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

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied