Issue related to taxability. of tenancy rights under GST. – GST – States – 12-28/2017-18-EXN-GST-(528)-15710-727 – Dated:- 17-5-2018 – Circular No. 12-28/2017-18-EXN-GST-(528)-15710-727 Government of Himachal Pradesh, Excise and Taxation Department To 1. The Additional Excise and Taxation Commissioner, South Zone. Shimla-9, H.P. 2. The Jt. Commissioner of State Taxes and Excise Central zone, North zone, Flying squad NZ/ SZ/ CZ. 3. The Director (Directorate Treasuries, Accounts and Lotteries) Block No-23 SDA Complex, Kasumpati, Shimla- 171009. 4. The Dy. Commissioner of State Taxes and Excise, Shimla, Solan, BBN Baddi, Sirimour, Bilaspur, Hamirpur, Mandi, Kullu, Chamba, Kangra, Revenue Distt Nurpur and Una, H.P 5. The Asstt. Commissioner of
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ch is also known as pagadi system the tenant acquires, tenancy rights in the property against payment of tenancy premium (Pagdi). The landlord be owner of the property but the possession of the same lies with the tenant. The tenant pays periodic rent to the landlord as long as he occupies the property. The tenant also usually has the option to sell the tenancy right of the said property and in such a case has to share a percentage of the proceed with owner of land. as laid down in their tenancy agreement. Alternatively, the landlord pays to tenant the prevailing tenancy premium to get the property vacated. 3. As per section 9(1) of the HPGST Act there shall be levied state tax on the intra-State supplies of services. The scope of supply inc
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such transaction thus should not be subjected to GST. is not relevant. Merely because a transaction or a supply involves execution of documents which may require registration and payment of registration fee and stamp duty would not preclude them from the scope of supply of goods and services and from payment of GST. The transfer of tenancy rights cannot be treated as sale of land or building declared as neither a supply of goods nor of services in para 5 of Schedule III to HPGST Act. 2017. Thus a consideration for the said activity shall attract levy of GST. 5. To sum up, the activity of transfer of tenancy rights' is squarely covered under the scope of supply and taxable per-se. Transfer of tenancy rights to a new tenant against consid
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