Come 1 July and leasing of land, renting of buildings as well as equated monthly Instalments (EMIs) paid for purchase of under-construction houses will start attracting the Goods and Services Tax (GST).
Sale of land and buildings will be however out of the purview of GST, the new indirect tax regime. Such transactions will continue to attract the stamp duty, according to the legislations finance minister Arun Jaitley introduced in the Lok Sabha for approval.
Electricity has also been kept out of the GST ambit.
GST, which the government intends to roll out from 1 July 2017, will subsume central excise, service tax and state VAT among other indirect levies on manufactured goods and services.
The Central GST (CGST) bill — one of the four legislations introduced, states that any lease, tenancy, easement, licence to occupy land will be considered as supply of service.
Also, any lease or letting out of the building, including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services as per the CGST bill.
The GST bills provide that sale of land and, sale of building except the sale of under construction building will nether be treated as a supply of goods nor a supply of services. Thus GST can’t be levied in those supplies.
From India, Ahmadabad