Bombay HC – Assignment of Leasehold Rights in MIDC Industrial Plot Not Taxable as Service under GST
The petitioner had assigned leasehold rights in the MIDC plot to another person for Rs.1.50 crores with the consent of MIDC on payment of additional premium of Rs.3,95,640/-.
The GST demand notice was that such “transfer of assignment of the MIDC plot” amount to “supply of services” in terms of Section 7(1) of the Act and classified as “miscellaneous services” at Sr.No.35 of the Notification dated 28.6.2017.
In that context, it was HELD that the “assignment of leasehold rights in an immovable property” cannot be termed as miscellaneous services.
Secondly, it was a long term lease i.e. leasehold ownership property for 95 years and transferable under clause 2(u) of the Lease between MIDC and the petitioner.
Therefore, the element of supply of service in the course of business was completely absent.
Even otherwise, as held by the Gujarat High Court, there is NIL rate for one time upfront amount leviable in respect of the service by way of lease of industrial plot for more than 30 years by SIDC, vide Notification No.12/2017 of 28.6.2017.
Judgment dated 9.1.2026 of the High Court of Bombay, Bench at Nagpur, in Writ Petition No.2145 of 2025 of Aerocom Cushions Pvt Ltd Vs. Assistant Commissioner.
