| Jul-06-2021

Gst Applicable on lease Rent paid for common salt manufacturing unit

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  • CA VenkataramaniP. GANESAN

    We are a registered dealer doing business on manufacturing common salt and from 01/04/2021 we have given total lands for lease to another common salt manufacturing company ( Registered Dealer) for annual lease Rs.1000000.00 . Shall I charge GST on forward charges

    CA VenkataramaniCA Venkataramani
    Compliance Expert

    The activity of providing land on lease, will qualify as a supply of services and accordingly, would be liable to tax at the rate of 18% under the HSN code 9972. In terms of Notification No. 13/2017 – CT (Rate) dated 28.06.2017, as amended, read with Section 9(3) of the CGST / SGST Act, 2017 renting of immovable property services by the Central Government, State Government, Union territory or local authority are alone liable to tax under reverse charge mechanism. In the instant case, it is understood that the supplier of services involving renting of immovable property is neither Central Government, State Government, Union territory nor local authority and accordingly, in our considered view, leasing of land is liable to tax under forward charge mechanism.

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