GST on Land Lease From MIDC

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Dipesh (Querist)

10 January 2025 Hi Expert,

We are in planning to sale our MIDC leased land to other on Rs. 15 Cr. In this case there are transfer charges of Land & GST is applicable on this transfer charges, here our question is that we have to pay GST on 15 Cr or not.

Thanks in Advance.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

11 January 2025 Business transactions involving the transfer of plots in Maharashtra Industrial Development Corporation (MIDC) estates are currently under scrutiny by the Goods and Services Tax (GST) authorities. The central GST department is now enforcing an 18% GST on such transfers, classifying them as leases, which are considered a service under GST regulations. This move affects all transfers made since the implementation of GST in July 2017, prompting concerns among business owners and tax consultants alike regarding the sudden demand for tax payments after years of inaction from the authorities.
The GST department is treating these plot transfers as leases, which incurs an 18% tax. This significant tax burden has led to a backlash from the Chamber of Small Industries Associations (COSIA), which argues that these transactions should be classified as sales rather than leases.

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