long term lease of immovable property

[DNS]

whether gst is applicable on long term lease of immovable property where contract for lease was entered pre-gst amount received under pre-gst and term of lease continued under gst also

[DR.MARIAPPAN GOVINDARAJAN]

It is applicable.

[DNS]

how to substantiate that it is applicable under gst, relevant provisions which supports under gst as well as service tax law?

[Ganeshan Kalyani]

The time of supply of service is completion of service or date of invoice . Even though the contract was entered pre GST the completion of service for each period is in GST regime. Hence get is applicable on the service supplied.

[Pavan Mahulkar]

Section 140

10) Save as otherwise provided in this Chapter, the goods or services or both supplied on or after the appointed day in pursuance of a contract entered into  prior to the appointed day shall be liable to tax under the provisions of this Act.

(11) (a) notwithstanding anything contained in section 12, no tax shall be payable on goods under this Act to the extent the tax was leviable on the said goods under the Value Added Tax Act of the State;

(b) notwithstanding anything contained in section 13, no tax shall be payable on services under this Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994;

[Pavan Mahulkar]

Typographical error

Please read Section 142 instead of Section 140

[DNS]

Dear sir

in this situation how do we bifurcate as to how much value liable under service tax law and how much value attract gst as under long term lease lump sum payment was made under service tax law nothing was receivable under gst law

[Pavan Mahulkar]

There's specific provision regarding Import under section 21 of IGST Act which could be helpful for understanding the provisions under section 142 of CGST Act

21. Import of services made on or after the appointed day shall be liable to tax under the provisions of this Act regardless of whether the transactions for such import of services had been initiated before the appointed day:

Provided that if the tax on such import of services had been paid in full under the existing law, no tax shall be payable on such import under this Act:

Provided further that if the tax on such import of services had been paid in part under the existing law, the balance amount of tax shall be payable on such import under this Act.

Explanation.––For the purposes of this section, a transaction shall be deemed to have been initiated before the appointed day if either the invoice relating to such supply or payment, either in full or in part, has been received or made before the appointed day.

AI Summary

GST applicability on long-term lease continues where supply occurs after appointed day despite pre-GST contract.
GST applies to periods of a long term lease supplied on or after the appointed day even if the contract and lump sum payment were made pre GST; the operative test is time of supply. Transition provisions (section 142) make supplies under pre GST contracts liable to GST for post appointed day performance, subject to reduction where tax was leviable or paid under the prior law, and allocation issues may arise when consideration was received earlier.