Liquor license

[Ethirajan Parthasarathy]

An Assesses has leased out the liquor license (for Retail Trade) to another Party.

As per terms of the contract, the lessee shall pay fixed amount monthly and also the annual fee payable for the license at the time of renewal.

The lesser is entitled to take credit of TCS done on purchase made by lessee.

There are three components

1. Monthly lease charges
2. TCS benefit
3. Annual license fee paid by the lessee

I am of the opinion all the three will have to be offered to tax both for Income tax as well as GST.

Please Confirm.

[DR.MARIAPPAN GOVINDARAJAN]

In my view, yes.

[Himansu Sekhar]

Monthly lease attracts gst at the actual owners end.Annual license fee paid to Govt. by the actual owners on reverse charge basis debatable

There may be Govt clarifications

[Himansu Sekhar]

Other experts may give some clarifications for academic purposes.

AI Summary

Taxability of leased liquor licences: lease receipts, renewal fee and TCS benefit treated as taxable under income tax and GST. Lease of a retail liquor licence produces three taxable components: monthly lease charges, the lessee-paid annual licence renewal fee, and the lessor's TCS credit benefit. All three are treated as consideration and, on the presented view, are taxable under Income Tax and GST. Monthly lease receipts are assessable as lease income and attract GST at the lessor's end. The annual licence fee paid by the lessee may be additional consideration and its GST treatment could invoke reverse charge analysis. The tax character of TCS credit to the lessor depends on income-tax and GST input credit rules.