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 in a state of fear by sending summons and has started an investigation into how many transfers of leased lands have taken place in MIDC (Maharashtra Industrial Development Corporation) area since July 2017.
The department seems to be taking a stand after 5 years that on transfer of leased land from one party to the other comes under the purview of supply of service and hence 18 per cent is leviable on the transaction, though MIDC is exempt. If this really goes through then it will sound a death knell for all the MSMEs that have sold their plots since July 2017 and also future transactions.
Also Read: Govt Relief To MSMEs; Centre Directs Ministries To Refund Forfeited Amount During COVID-19
COSIA, a pan-India MSME apex body, has taken up this issue and has 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 finance minister, to take up the issue with the GST council.
The initial lease of land from MIDC to the industry is exempt under GST. However, no specific exemption has been granted for further assignment of leasehold rights. This is a huge amount and especially for the MSME this is going to break their back.
This is a PAN-India issue and presently, there are thousands of units in Maharashtra alone, which have not paid GST on the assignment of leasehold rights of such land taken on lease from MIDC on the understanding that the “assignment of leasehold rights in land” is akin to “sale of land” and such transactions fall under Schedule III of the CGST Act on which GST is not payable.
All have paid stamp duty as per the sale of land, and also paid the income tax on short-term and long-term gains considering as deemed ownership, and the premium is paid to MIDC for transferring the lease.
During COVID times, many MSME have suffered big losses and some had to shut down and sell their plots, just to square up their liabilities.
COSIA has brought together the associations from all over India under one platform and is taking up their cases before the respective state governments as well as at the centre government level.
“We have written to all the concerned departments and requested to amend/clarify the GST rule for the long term lease with retrospective effect and give relief to the thousands of MSMEs from all over India by considering it in schedule III,” COSIA said.
Read all the Latest Business News here
Comments
0 comment