No GST on transfer of leasehold property-Hon'ble Gujarat High Court Decision

Assignment of Leasehold Rights in Industrial Plot Considered Non-Taxable Under GST
Dhiraj Can Co. (P) Ltd. vs. Union of India
Civil Appeal Number: 3596 of 2025

The Gujrat High Court has ruled that the assignment of leasehold rights in an industrial plot, when done for consideration, is classified as a transfer of immovable property benefits and is therefore not subject to taxation under GST
(Click here to download complete copy of judgement)

Analysis

• GST department has issued notices and passed orders to various taxpayers who have transferred their properties allotted by government authorities on leasehold basis on the basis of information from property registration departments
• In India, Government authorities generally allot properties on leasehold basis
• The court has pronounced that transfer of property shall not be considered as supply and shall not be liable for GST
• This judgement has provided a big relief to industries whose GST assessment proceedings are initiated or pending with appellate authorities