TaxTMI 
TaxTMI 
Immovable property given on lease
X X X X Extracts X X X X
X X X X Extracts X X X X
....mmovable property given on lease<br> Query (Issue) Started By: - vignesh VSACCOUNTOPRIVATELIMITED Dated:- 25-2-2023 Last Reply Date:- 1-3-2023 Goods and Services Tax - GST<br>Got 7 Replies<br>GST<br>Sir.One person leases his commercial building for a long term lease of 15 years for an amount of Rs 10 lakhs. Whether there is any GST liability for the amount on the part of lessor and lessee. If paya....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble whether it is payable in the first year itself or over a period of 15 years on proportionate basis?.GST rate for the above activity? Can you please clarify. Reply By Amit Agrawal: The Reply: Facts are not clear. It is presumed that lessor has got entire rent of Rs. 10 Lac for 15 years at start of lease itself as per terms of contract and lessor is either registered under GST or required to....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be registered under GST. And if so, GST @ 18% is payable by lessor on forward charge basis on entire rent of Rs. 10 Lac at the time of receipt of such payment itself. These are ex facie views of mine and the same should not be construed as professional advice / suggestion. Reply By vignesh VSACCOUNTOPRIVATELIMITED: The Reply: Sir. The Lessor is already a registered person under GST. The lea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se amount is received upfront for 10years. Thank u sir. but why shouldn't the lease amount be taken proportionately over 10 years and taxed. pls give any provision which restricts me to do Reply By KASTURI SETHI: The Reply: Pl. treat it as advance amount. I agree with Sh.Amit Agrawal, Sir. Reply By Amit Agrawal: The Reply: Kindly refer to sub-section (1) & 2 (a) of Section 13 of the CGST ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Act, 2017 read with explanation (i) under sub-section (2). Reply By vignesh VSACCOUNTOPRIVATELIMITED: The Reply: Thank u Experts & Seniors. Sir i will summarise my understanding. Lease amount received will be subject to tax for the amount received in the year of receipt and the lease amount will be proportionately taken for 15 years and offered as income each year for income tax and gst. The bal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ance amount for which GST already paid will be treated as advance and adjusted each year. Reply By Amit Agrawal: The Reply: Upfront payment need not necessarily be 'advance' for paying GST. One need to check contract-terms to know its nature. If contract for lease of 15 years obligates lessee to pay entire consideration upfront, such payment so done will not be 'advance' from G....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ST point of view. And if so, there is no question of proportionate disclosure of rent under GST over 15 years. And due to reasoning given in my earlier posts, GST on entire consideration (i.e. rent for 15 years) will be payable immediately upon receipt of the consideration after raising tax-invoice of Rs. 10 Lac (i.e. for entire rent for 15 years) plus GST (& disclosure such rent only one-time un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der GST). However, contract-terms are as such that said 10 Lac is either 'advance' or 'deposit', then, tax-treatment / disclosure will be different under GST (& same is different for 'advance' & 'deposit'). P.S. As I do not deal with income tax, I cannot comment upon treatment to be given under income tax. These are ex facie views of mine and the same should not....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be construed as professional advice / suggestion. Reply By KASTURI SETHI: The Reply: I agree with the views of Sh.Amit Agrawal Sir, to the extent that whether the above said amount is equal to 'ADVANCE' or not, depends upon the terms & conditions of the contract.<br> Discussion Forum - Knowledge Sharing ....