Last Update: February 09, 2023, 18:24 IST
In an official release here on Thursday, COSIA President Sandeep Parekh said that the GST department has put the industry on a spree by sending summons and started probing the transfer of leased land in MIDC (Maharashtra Industrial Development) Is. Corporation) area from July 2017. (Representational image)
During the COVID times, many MSMEs have suffered huge losses and some have had to close down and sell their plots to meet their liabilities.
The Chamber of Small Industries Association (COSIA) has urged the government to revisit the issue of GST on leased land affecting MSMEs across the country.
In an official release here on Thursday, COSIA President Sandeep Parekh said that the GST department has put the industry on a spree by sending summons and started probing the transfer of leased land in MIDC (Maharashtra Industrial Development) Is. Corporation) area from July 2017.
The department seems to be taking the stand after 5 years that transfer of leased land from one party to another comes under the purview of supply of service and hence the transaction is taxed at 18 per cent, though MIDC is exempt. Is. If this actually happens then it will be the death knell for all the MSMEs who have sold their plots since July 2017 and future transactions as well.
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COSIA, an all India MSME apex body, has taken up the issue and represented its case before Finance Minister Nirmala Sitharaman and the GST Council. It has also appealed to Maharashtra Deputy Chief Minister Devendra Fadnavis, who is the state’s finance minister, to take up the issue with the GST Council.
Initial lease of land from MIDC to industry is exempt under GST. However, no specific exemption has been provided for further assignment of leasehold rights. This is a huge amount and especially for MSMEs, it is going to break their back.
This is a pan India issue and at present, there are thousands of units in Maharashtra alone, who have not paid GST on assignment of leasehold rights of such land taken on lease from MIDC, understanding that “assignment of leasehold rights in land”. “Assignment” is tantamount to “sale of land” and such transactions fall under Schedule III of the CGST Act on which GST is not payable.
Everyone has paid stamp duty as per sale of land, and also paid income tax on short term and long term gains as deemed ownership, and premium is paid to MIDC for transfer of lease.
During the COVID times, many MSMEs have suffered huge losses and some have had to close down and sell their plots to meet their liabilities.
COSIA brings together all associations India Under one platform and taking up their cases at the level of the concerned State Governments as well as the Central Government.
COSIA said, “We have written to all concerned departments and requested to amend/clarify GST rule for long term lease with retrospective effect and give relief to thousands of MSMEs across India by considering them in Schedule III.”
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)