GST on sale of lease hold land

[Kaustubh Karandikar]

XYZ is owning a factory which is situated on land taken on lease from the MIDC. XYZ is selling the entire factory along with assets and liabilities to PQR. In this process, XYZ is also selling the leasehold rights of the land on which the factory building is standing. GST authorities are asking to pay GST to the seller on transfer of leasehold rights. To avoid litigation if XYZ will pay GST on it, is PQR eligible to claim input tax credit on the same?

AI Summary

GST Dispute: Can PQR Claim ITC on Leasehold Rights Transfer in XYZ's Factory Sale? AAR Ruling Cited XYZ is selling a factory, including assets and liabilities, to PQR, which involves transferring leasehold rights of land leased from MIDC. GST authorities demand GST payment on the leasehold rights transfer. The discussion centers on whether PQR can claim input tax credit (ITC) if XYZ pays GST. One participant suggests that leasehold rights transfer may not be valid without government approval. Another highlights that transferring a business as a going concern is GST-exempt. A ruling from Gujarat's AAR indicates that ITC is not available for leasehold rights transfer under certain conditions, referencing a case involving M/s Bayer Vapi Private Limited.