TaxTMI 
TaxTMI 
Eligibility of Input Tax Credit (ITC) on Lease of a Sugar Factory under a Rehabilitate-Operate-Transfer (ROT) Agreement Covering Land, Building, Plant & Machinery, and Corporeal Rights
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....ligibility of Input Tax Credit (ITC) on Lease of a Sugar Factory under a Rehabilitate-Operate-Transfer (ROT) Agreement Covering Land, Building, Plant & Machinery, and Corporeal Rights<br> Query (Issue) Started By: - TEAM GST Dated:- 13-7-2026 Last Reply Date:- 19-7-2026 Goods and Services Tax - GST<br>Got 5 Replies<br>GST<br>Eligibility of Input Tax Credit (ITC) on Lease of a Sugar Factory under a....
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.... Rehabilitate-Operate-Transfer (ROT) Agreement Covering Land, Building, Plant & Machinery, and Corporeal Rights Reply By KASTURI SETHI: The Reply: Pl. elaborate your query with full facts and specific questions. Reply By TEAM GST: The Reply: Sugar factory 'A"is leased out to another sugar factory 'B' on Lease- Rehabilitate-Operate and Transfer basis. The lease of scheduled p....
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....roperty includes land and building, plant and machinery, allied equipment, agricultural land, farms and other movable assets -corporeal rights. Both factory A and factory B are registered under GST. Factory A is raising an invoice towards the lease amount on Factory B. Now can Factory B avail ITC on the entire amount of GST paid on the lease or is it restricted to only plant and machinery and alli....
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....ed equipment. Reply By Raam Srinivasan Swaminathan Kalpathi: The Reply: Dear Querist Typically in such situations only a single tax invoice is issued towards 'Taxable leasing service'. Also, it is advisable that the lease deed clearly establishes that it is a single business lease of a functioning industrial undertaking. In compliance of the above, I am of the view that Factory ....
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....B is entitled to ITC on the entire GST charged and not merely on the portion attributable to Plant and Machinery subject to fulfillment of provisions of Section 16 r w r 36. Kindly note that I have assumed that all of the leased assets are used only for taxable supplies. Reply By TEAM GST: The Reply: Sir, Thank you for your valuable insight. The leased assets will be used for both taxab....
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....le and exempt outward supplies. Accordingly, the provisions of Rule 42 / 43 of the CGST Rules, 2017, shall be made applicable. Reply By Shilpi Jain: The Reply: Credit would be eligible.<br> Discussion Forum - Knowledge Sharing ....