ENA Economy 2025-01-07 14:40:41 <p><span style="font-size:14px"><strong>Gandhinagar, Jan 7 (KNN)</strong> The Gujarat High Court has issued a significant ruling declaring that Goods and Services Tax (GST) cannot be applied to the transfer of leasehold rights in land granted by the Gujarat Industrial Development Corporation (GIDC) to third parties.</span></p> <p><span style="font-size:14px">The judgment, delivered in the case of Suyog Dye Chemie versus Union of India, provides substantial relief to businesses facing retrospective GST demands of approximately Rs 8,000 crore in Gujarat and Maharashtra alone.</span></p> <p><span style="font-size:14px">The verdict addresses a fundamental legal question regarding the taxation of leasehold and industrial land transfers, which are already subject to state stamp duty.</span></p> <p><span style="font-size:14px">The petitioners successfully argued that these transactions should be classified as land sales, a category specifically exempt from GST.</span></p> <p><span style="font-size:14px">Prior to this ruling, companies faced an 18 percent GST levy on subsequent transfers, creating what many described as an unsustainable tax burden.</span></p> <p><span style="font-size:14px">The decision's impact extends beyond Gujarat, potentially influencing similar pending cases, including a notable petition before the Bombay High Court filed by the Chamber of Small Industry Associations.</span></p> <p><span style="font-size:14px">Legal experts suggest this ruling could set a precedent for resolving comparable disputes across the country.</span></p> <p><span style="font-size:14px">Abhishek A Rastogi, counsel for petitioners in the Bombay High Court case, emphasised that the GST framework explicitly excludes land and building sales, arguing that any deviation would result in tax cascading and double taxation.</span></p> <p><span style="font-size:14px">The court's decision marks a pivotal moment in addressing concerns over multiple taxation layers in industrial land transactions, potentially streamlining future business operations and reducing litigation over tax demands.</span></p> <p><span style="font-size:14px">This development particularly benefits companies that have received demand notices and faced the burden of pre-deposit requirements for appeals.</span></p> <p><em><strong><span style="font-size:14px">(KNN Bureau)</span></strong></em></p> 40537 https://knnindia.co.in/news/newsdetails/economy/gujarat-high-court-rules-gst-not-applicable-on-gidc-leasehold-rights-transfer 2025-01-07 14:40:41 knnindia.co.in