Capital contribution to LLPs can trigger GST on movable assets, leasehold rights, and under-construction property transfers.
Capital contribution of assets to an LLP or partnership firm may constitute a supply under the CGST Act because the contributor and the firm are distinct persons and non-monetary economic benefits can amount to consideration. Transfer of movable property as capital contribution is treated as a supply of goods, while transfer of leasehold rights is best characterised as a supply of services under Schedule II. For immovable property, a completed building may fall outside GST under Schedule III, but an under-construction building is taxable as a supply of services. (AI Summary)