GST - ITC CREDIT ON LEASED FACTORY PREMISES - GST ON LEASE RENT -, Goods and Services Tax - GST

[venkataraman swaminathan]

Dear Sir,

we are a manufacturer of automobile components on j/w basis and our factory

premises is in a leased land. The land is taken for lease for a period of 35 years and the necessary factory building constructions are built by us by our own . we are paying monthly lease rent for the land and the land lord is giving his lease charges with GST and we are availing GST ITC Credit based on the Land lord invoice.

we have seen some AAR recently on this leased premises some ITC confusion.

Hence we request guidance from our experts panel on the GST ITC Credit as eligible or not eligible on the Lease charges for the Land.

Thanking you

V Swaminathan

Posts / Replies

[KASTURI SETHI]

Since the decision of AAR West Bengal in the case of GGL Hotel and Resort = 2019 (1) TMI 488 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL has been upheld by AAAR = 2019 (5) TMI 964 - APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL, WEST BENGAL. GOVT. =  will follow this decision. This will become a precedent now. You can pay tax under protest and fight the case. Your issue is worth fighting. By paying tax under protest you will save your interest and penalty. At present this is the only interim solution.

[venkataraman swaminathan]

Dear Sir,

Thanks for Quick feedback on the doubt raised.

IN this connection I , submit to state that ,we are a service receiver from the land lord

and we are availing GST ITC Credit as per the Invoice given by Land Lord with GST & GST

is paid by the Landlord , and we are availaing ITC Credit and utilizing for our ouptut tax payable . Request to clarify , for the said ITC Credit availed by us is eligible or not eligible , since in the said AAR , for that some period building is not constructed etc...etc.. issue .

In our case not like that , we pay monthly Lease Rental charges with GST and we ae availing GST ITC Credit and Building is constructed by us on the Leased LAND .

submitted for clarification / guidance please.

thanks

v..swaminathan

[KASTURI SETHI]

Nomenclature of ALL taxable services being provided by you is required.

[venkataraman swaminathan]

dear Sir,

Good Morning

We are a manufacturer of automobile components based on the RM supplied by our customer ( principals) and we are getting Labour charges from our customer for the job work done by us and discharging GST tax liability under SAC code.

v Swaminathan

[KASTURI SETHI]

Sh.V. Swaminathan Ji,

Keeping in view your latest information supplied by you on the issue, I am of the view that the judgement of GG Hotel and resort mentioned above is not applicable to your case inasmuch as AAAR has disallowed ITC on long term lease for pre-operative period and construction purpose. Your situation is entirely different. In your case, ITC is allowed. Your case is not hit by Section 17(5)(d) of CGST Act.

2019 (5) TMI 964 - APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL

2019 (1) TMI 488 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL

[venkataraman swaminathan]

dear sir

Thank you Very much for the quick guidance & opinion

v swaminathan