GST on sale of factory

[Kaustubh Karandikar]

XYZ is owner of one factory located at MIDC. XYZ is selling that factory along with all the assets in the factory for a lump sum amount. The factory is situated on land taken on lease from the MIDC. Now, there will be two types of sale for GST purpose: -

1) Sale of factory building along with its assets. (Assets include Plant & Machinery, F&F, electrical installation etc)

2) Sale of leasehold rights of the land on which the factory building is standing.

Need clarity regarding GST implications on sale transactions mentioned in both the above points along with valuation methodology to be followed.

AI Summary

XYZ's Factory Sale: GST Exemption for Going Concern Transfer; Asset-Only Sales Subject to GST. Leasehold Rights Vary. XYZ is selling a factory, including assets and leasehold land rights, and seeks clarity on GST implications. Responses suggest treating the transaction as a 'service by way of transfer of a going concern,' which is GST-exempt. If only assets are sold, GST applies at the applicable rate. Completed land and building sales are not subject to GST. The sale of leasehold rights may be GST-exempt if treated as land, otherwise, it is taxable. The sale of the business as a going concern attracts a nil GST rate.