GST not applicable on GIDC lands on lease, says Gujarat HC

In a big relief to factory owners, Gujarat High Court’s division bench comprising Justices Bhargav Karia and Niral Mehta held that GST is not applicable in Gujarat Industrial Development Corporation – GIDC’s leasehold land.

GIDC had been issuing notices to those who transferred land held on a leasehold basis, demanding 18% GST on the value of the lease transfer.

These notices, issued since 2017, created a GST liability of approximately ₹8,000 crore for small and medium enterprises related to all leasehold transactions.

Advocates Uchit Sheth and Tarak Damani, associated with the case against GIDC, stated that the notices were challenged after they were received. 

Despite representations made to the Commissioner of Appeals and other authorities, the businesses did not receive justice.

Lastly, the Gujarat Chamber of Commerce and Industry (GCCI) took up the matter and Pathik Patvari filed a petition.

Over 180 GIDC leasehold lands were sent notices in Sanand, Saikha, Ankleshwar, Vatva, Naroda, Odhav, and Vapi.

As per reports, the GIDC officials even threatened to acquire the lands of businessmen if they failed to pay the GST amount.

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