GST - ITC CREDIT ON LEASED FACTORY PREMISES - GST ON LEASE RENT -

[venkataraman swaminathan]

Dear Sir,

we are a manufacturer of automobile components on j/w basis and our factory

premises is in a leased land. The land is taken for lease for a period of 35 years and the necessary factory building constructions are built by us by our own . we are paying monthly lease rent for the land and the land lord is giving his lease charges with GST and we are availing GST ITC Credit based on the Land lord invoice.

we have seen some AAR recently on this leased premises some ITC confusion.

Hence we request guidance from our experts panel on the GST ITC Credit as eligible or not eligible on the Lease charges for the Land.

Thanking you

V Swaminathan

AI Summary

Input tax credit on lease rent allowed when lessee builds factory; prior hotel ruling not applicable, ITC permissible.
Input tax credit is claimed on GST charged for lease rent of land where the lessee built the factory; because the lessee performed the construction and is the service recipient, a prior AAR disallowing ITC for long term lease during pre operative construction is inapplicable. Consequently ITC on the lease charges is allowable and not barred by the Act's blocked credit principles.