Nagpur: In a big relief to industries, Gujarat High Court on Friday, January 3, pronounced an order wherein it is held that no GST is applicable on Assignment/Transfer of Leasehold Rights to third party since it would be transfer of immovable property and therefore question of ITC would not arise.
Chamber of Small Industries Association (COSIA) has also filed a writ on this matter in Bombay High Court, which now may be decided on the same grounds and pass the order on similar grounds as that of Gujarat High Court.
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CA Julfesh Shah, Chairman, COSIA Vidarbha, said, “Our organization is a brand identity of MSMEs and was one amongst the first to take the initiative to represent this matter before various authorities. MSME sector was badly affected due to this move of the GST department to recover GST and that too from retrospective effect on assignment /transfer of MIDC land to third parties and started sending notices to transferor for recovery of GST for past transactions as well as current transactions,” added CA Shah.
Shah further said that this proved to be very burdensome for MSME entities as no set off was allowed on the same. COSIA immediately took up the issue and represented to the GST Council and also met Devendra Fadnavis who was then the Deputy Chief Minister of Maharashtra and also Union Minister Nitin Gadkari to put up the matter before the GST Council and plead for relief for the same.
“But as no decision regarding the same was taken, the GST Department started putting pressure on the transferor for paying GST along with interest and penalty on the past transactions which created quite an uproar in the industrial fraternity,”CA Julfesh Shah said. He said that this landmark decision of Gujarat High Court will prove to be a big relief for industrial fraternity pan India & also it is instructed by the High Court that already who had made the GST payment should be refunded.
Sources said that a detailed order copy of the court will be available by coming Monday.
