Introduction of GST on Leasing and Renting
Come 1 July, leasing of land, renting of buildings, as well as equated monthly installments (EMIs) paid for the purchase of under-construction houses will start attracting the Goods and Services Tax (GST).
Exclusions from GST
The sale of land and buildings will, however, be out of the purview of GST, the new indirect tax regime. Such transactions will continue to attract stamp duty, according to the legislation finance minister Arun Jaitley introduced in the Lok Sabha for approval. Electricity has also been kept out of the GST ambit.
Implementation and Scope of GST
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, or license to occupy land will be considered a supply of service. Also, any lease or letting out of a 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.
GST Exemptions
The GST bills provide that the sale of land and the sale of buildings, except the sale of under-construction buildings, will neither be treated as a supply of goods nor a supply of services. Thus, GST can't be levied on those supplies.
Come 1 July, leasing of land, renting of buildings, as well as equated monthly installments (EMIs) paid for the purchase of under-construction houses will start attracting the Goods and Services Tax (GST).
Exclusions from GST
The sale of land and buildings will, however, be out of the purview of GST, the new indirect tax regime. Such transactions will continue to attract stamp duty, according to the legislation finance minister Arun Jaitley introduced in the Lok Sabha for approval. Electricity has also been kept out of the GST ambit.
Implementation and Scope of GST
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, or license to occupy land will be considered a supply of service. Also, any lease or letting out of a 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.
GST Exemptions
The GST bills provide that the sale of land and the sale of buildings, except the sale of under-construction buildings, will neither be treated as a supply of goods nor a supply of services. Thus, GST can't be levied on those supplies.