Summary
- The Supreme Court has definitively settled the controversy surrounding the levy of GST on long-term lease transactions of immovable properties, affirming the Bombay High Court's ruling in Aerocom Cushions (P.) Ltd.
- The Court dismissed the GST authorities' Special Leave Petition, confirming that such transactions do not constitute a "supply of service" under Section 7(1) of the CGST Act, 2017.
- This ruling provides much-needed clarity for the real estate and infrastructure sectors, ensuring that long-term leases are not subject to GST or withholding tax under the Income-tax Act.
- The decision paves the way for potential government notifications to formalize this exemption, fostering growth in India's real estate market.
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