The Builders Association of Navi Mumbai has approached the Supreme Court through a special leave petition challenging the order of the Bombay High Court favoring levy of GST on one-time premium.
While admitting the Special Leave Petition, Justice A.K Sikri and Justice Ashok Bhushan has issued notice to the Central Government.
On April this year, Justice S.C Dharmadhikari and Justice Prakash D. Naik had upheld the Goods and Services Tax (GST) levied by the Central Industrial and Development Corporation of Maharashtra Limited (CIDCO) on one-time lease premium charged for letting out plots of land on lease basis.
The petitioners challenged an order levying/collecting the Goods and Service Tax (GST) on the one-time lease premium charged by City Industrial and Development Corporation ( CIDCO ) while letting plots of land on the lease basis. The petitioners have obtained plots in the above areas, but what they are questioning is that when the allotment letter was issued, the allottee was called upon to pay, on the one-time lease premium amount, the GST separately by a Demand Draft drawn in the name of the fourth respondent payable at Mumbai/Navi Mumbai.
The Special Leave Petition filed before the Court stated that the GST has not replaced or substituted stamp duty which is chargeable on a transaction of transfer or conveyance of immovable property , and which continues to be chargeable even after the introduction of GST.
“This is a clear and unequivocal indication that a transaction of transfer of immovable property which attracts stamp duty cannot possibly be considered to also attract GST. This is especially so because the basic object of introduction of GST is itself to put an end to the highly undesirable consequences and cascading effect of multiple levies of taxation on the very same subject-matter,” it said.
“This basic object of the levy of GST will itself be completely frustrated and defeated if the impugned Judgment of the Bombay High Court which upholds the double levy of stamp duty as well as GST on a transfer of immovable property. The High Court has completely failed to appreciate that the provisions of the GST Act necessarily have to be so construed as to avoid such a double levy of both stamp duty as well as GST,” the petition reads.
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