GST on assignment of leasehold rights stayed pending further hearing amid competing views on scope of supply and taxability.

GST treatment of an assignment of leasehold rights in land and the buildings on it was examined in relation to a lump sum transfer by a leaseholder to a third party. A prior Division Bench view of another High Court had treated such an assignment as a transfer of benefits arising from immovable property, outside the scope of supply under Section 7(1)(a) of the CGST Act, read with Schedules II and III, and not liable under Section 9. As no contrary view was placed and connected matters on the same issue were pending, the Bombay High Court stayed the effect and implementation of the impugned adjudication order pending further hearing.

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Issues: Whether GST could be levied on the assignment of leasehold rights in a plot of land and the buildings constructed thereon for a lump sum consideration, and whether the impugned adjudication order should remain stayed pending further hearing.

Analysis: The petition raised a GST question concerning transfer of leasehold rights allotted by MIDC to a third party. A prior Division Bench view of another High Court on a similar transaction had held that such an assignment amounts to transfer of benefits arising from immovable property and would not fall within the scope of supply under Section 7(1)(a) of the Central Goods and Services Tax Act, 2017, read with Schedule II and Schedule III, nor attract tax under Section 9. Noting that no contrary view was placed and that connected matters on the same issue were pending, the Court considered the issue important enough to warrant protection of the subject matter.

Outcome: The effect and implementation of the adjudication order were stayed and the petition was listed with connected matters for further hearing.

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