Court Buzz, GST

Assignment of leased premises classified under SAC 999792 and taxable @ 18% :West Bengal AAR

Case: Enfield Apparels Ltd.

Forum: West Bengal AAR


The NCLT initiated corporate insolvency resolution proceedings against the Applicant. The Applicant under the CIRP was required to assign its leased factory premises to the Liquidator. The Liquidator sought an advanced ruling on whether GST is payable on the consideration receivable on such assignment. If so, what should be the SAC and the rate applicable? 

Key points

The Authority held that the activity of assignment is in the nature of agreeing to transfer one s leasehold rights. It does not amount to further sub-leasing, as the Applicant’s rights as per the Deed stands extinguished. Neither does it create fresh benefit from land other than the leasehold right. It is like a compensation for agreeing to do the transfer of the applicant s rights in favour of the assignee. It is a service classifiable under „Other miscellaneous service (SAC 999792) and taxable @ 18% under Sl No. 35 of Notification No. 11/2017 CT (Rate) dated 28/06/2017 (State Notification No. 1135- FT dated 28/06/2017).

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