Chamber of Small Scale Industries Association (COSIA), Vidarbha, has welcomed the Supreme Court’s landmark decision dismissing the Revenue Department’s Special Leave Petition (SLP) against a Bombay High Court ruling. The apex court’s decision effectively sets aside the Goods and Services Tax (GST) levy on the assignment of leasehold rights in industrial land.COSIA was amongst the first to file a writ petition at Mumbai HC challenging levy of GST on leasehold rights on industrial land.
Hailing the historic judgment, CA Julfesh Shah, Chairman of COSIA Vidarbha, stated that it brings immense relief to small and medium enterprises optimizing or transitioning land holdings.The levy of GST on leasehold rights @18% was burdensome for the buyer as no set off was allowed on it.It discouraged several transfers of leasehold rights of industrial land all over the country specially Maharashtra,Shah added.
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May 22- 2026 - Time 10.30Hrs
The Supreme Court agreed that transferring leasehold rights to a third party constitutes a transfer of immovable property, placing it outside the definition of ‘Supply’ under Section 7 of the CGST Act.The bench, comprising Justice Dipankar Datta and Justice Satish Chandra Sharma, observed that such an assignment—done with MIDC’s permission—is not in the course or furtherance of business.
The court rejected reliance on other pending challenges, emphasizing that each legal matter turns on its unique facts.
Advocate Divyanshu Rai represented the Assessee, while AOR Gurmeet Singh Makker appeared for the Revenue. COSIA noted this settles a major contention, preventing tax litigation.
