27.01.2023: MIDC plot transfers to third party under GST scanner

Businessmen having transferred their plots in MIDC’s industrial estates to others may soon have the taxman knocking at their doors. The central GST department is in the process of extracting 18% duty for such transactions.

The deals are being taken as lease which is classified as service and attracts GST. All such transfers since GST came into effect in 2017 are being now covered for the tax demand.

Tax consultants have questioned the department’s inaction in the last five years, and a sudden awakening on the matter fearing that it may create ripples among businessmen.

The Directorate of GST intelligence (DGGSTI) which works against duty evasion is collecting data of such transfers since July 2017.

There is no GST on the original allotment by MIDC. However, if the individual allottees further lease the land to others than it is subject to tax.

The DGGSTI communication to MIDC says that it is in the process of verification of cases of plot transfers since July 2017 to confirm whether the transferor has paid the tax or not.

Sources say it is not new for businessmen to corner plots and later transfer it at a premium. The transfer charges are charged on the difference of new and old rates of MIDC. However, plots change hands for a much higher price.

Source: The Times of India 

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