Applicability of GST on One Time Long Term Lease Premium: Gujarat AAR

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Applicability of GST on One Time Long Term Lease Premium: Gujarat AAR

Gujarat Authority of Advance ruling (AAR) has finally held that that Goods and Service Tax (GST) should be imposed on one time long term lease premium obligated to pay via Jinmangal Corporation to Ahmedabad Urban Development Authority.

The Petitioner is the owner of Jinmangal Corporation acquired a bid for plot Chandkheda by e-auction carried by the Ahmedabad Urban Development Authority (AUDA). They are obliged to pay the premium for the lease for one time of Rs. 35,65,85,940 for the long term for the plot.

The petitioner also obliged to return a yearly lease premium for Rs. 5 per Sq. Meter every year up till 99 years as stated under the quotation papers entitled as lease premium return for the year.

Petitioner Seeks the Advance Ruling on Numerous Issues. Firstly under section 7, does the Jinmagal Corporation have to pay the tax as a one-time long-term lease premium to Ahmedabad Urban Development Authority.

Second, under GST Reverse Charge Mechanism in accordance with Section 9(3), the Jinmangal Corporation does have the need to pay the returns as a one-time premium obligatory to AUDA in the enlightenment of notification No. 13/2017 as revised on date 05/2019.

Thirdly, does the yearly lease premium paid through the petitioner is supplied.

And lastly, beneath the reverse charge mechanism compliance with section 9(3) does the Jinmangal Corporation is expected to give the returns for a one-time lease premium obligated to AUDA under notification No. 13/2017 as amended by Not. No.  05/2019.

The one-time long-term lease premium is obligated through Jinmangal Corporation engages in exports and supply thus it is entitled to furnish the tax under Section7 to Ahmedabad Urban Development Authority.

Beneath the reverse charge mechanism under section 9(3), the AAR Jinmagal Corporation is liable to furnish the returns on the time lease premium obligated to AUDA stated in the notification No. 13/2017 as amended by 05/2019.

The Authority of Advance Ruling (AAR) moreover directed that the yearly lease premium given by the applicant comes under the export/supply.

The council declares that the Jinmangal corporation is needed to let out the return beneath the reverse charge mechanism in compliance with act 9(3) on a time lease which is obligated to AUDA under Notification No. 13/2017 as amended by Not. No. 05/2019.

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