GST on assignment of leasehold rights was treated as outside the scope of supply, with interim protection granted.

GST is discussed in the context of assignment of leasehold rights in a plot of land, together with buildings, for lump-sum consideration. The text notes a prior Division Bench view that such an assignment is a transfer of benefits arising from immovable property and therefore falls outside the scope of supply under Section 7(1)(a) of the CGST Act, read with Schedule II and Schedule III. In light of that existing view and no contrary authority being shown, the matter was treated as needing consideration with connected petitions. Pending final hearing, ad-interim protection was granted against the impugned order.

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Issues: Whether GST can be levied on the assignment of leasehold rights in a plot of land, together with buildings constructed thereon, to a third party for lump-sum consideration, and whether interim protection should be granted pending further hearing.

Analysis: The issue was noticed as being covered by a prior Division Bench view of another High Court holding that such assignment is an assignment or transfer of benefits arising out of immovable property, and therefore would not fall within the scope of supply under Section 7(1)(a) of the Central Goods and Services Tax Act, 2017 read with Clause 5(b) of Schedule II and Clause 5 of Schedule III. In view of that existing view and the absence of any contrary view placed before the Court, the matter was treated as requiring consideration along with connected petitions. Pending final hearing, ad-interim protection was granted against the impugned order.

Outcome: Ad-interim stay granted on the impugned order and the petition was directed to be heard with connected matters on a later date.

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