Whether assignment of leasehold right on land is taxable under the GST

Last updated: 17 August 2020
Quick Summary
The West Bengal Authority for Advance Ruling has determined that the assignment of leasehold rights on land is considered a service for GST purposes, not a transfer of immovable property. This ruling clarifies that such assignments are taxable under the 'Other miscellaneous services' category at an 18% GST rate. Additionally, the transfer fee paid to the sub-lessor for this assignment is also subject to GST and eligible for input tax credit.

Court :
West Bengal Appellate Authority for Advance Ruling

Brief :
Section 3(26) of the General Clauses Act, 1897 defines “immovable property” as to include land, benefits to arise out of the land, and things attached to the earth, or permanently fastened to anything attached to the earth. Applicability of the General Clauses Act, 1897 in the context of a Special Act like the CGST Act, 2017, however, is limited to areas where no express provisions are made under the said Special Act.

Citation :
05/WBAAR/2020-21 dated 10/08/2020

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