*GST on Lease/ Rent Payments: PIL in Supreme Court challenging Constitutional Validity–TAXSCAN

Clipped from: https://www.taxscan.in/gst-on-lease-rent-payments-pil-in-supreme-court-challenging-constitutional-validity/168916/?utm_source=izooto&utm_medium=push_notifications&utm_campaign=GST%20on%20Leas


By Rasheela Basheer – On April 18, 2022 2:34 pm

GST - Lease - Rent Payments - PIl - Supreme Court - Constitutional - Validity - taxscan

A plea has been filed before the Supreme Court challenging constitutional validity of levy of GST on lease/ rent payments where a bench of Justice M.R. Shah and Justice B.V. Nagarathna has asked the petitioner(s) to serve an advance copy to the Additional Solicitor General to seek instructions in a plea challenging constitutional validity of levy of GST on lease/ rent payments.

Posting the matter on 4th May, the two-judge bench observed, “Let one advance copy be served on Shri N. Venkataraman, learned ASG, who may take the instructions in the matter and file the counter affidavit.”

The petitioner has filed an SLP against the order passed by the Bombay High Court on 22.01.2020 in W.P. 715 of 2019, whereby relying on its earlier judgments in the case of leviability of “service tax” under Chapter V of the Finance Act, 1994 on lease/rent payments, the High Court had dismissed the writ petition filed by the petitioner.

Notably, petitioner had filed a writ petition before the Bombay High Court, inter alia, challenging the constitutional validity of Para 2 of Schedule II to the Central Goods and Services Tax Act, 2017 and the Goa Goods and Services Tax Act, 2017 on the following grounds:

Under Article 246A of the Constitution of India, GST can be levied only on “goods and services”. In case of a lease/rent agreement there is no “service” provided by the lessor to the lessee. Thus, there can be no levy of GST on the same. b. Only the State Legislatures has the power to tax transactions relating to immovable property under Entry 49 List II of the Seventh Schedule of the Constitution. Thus, GST cannot be levied under Article 246A on such a transaction.To Read the full text of the Order CLICK HERE

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