Page 99 - DTPA Journal December 21

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Nov. - Dec., 2021

From the above chart it is clearly seen that the basis exemption of Rs 2,50,000/- is available to an
association of persons also and since Section 164(2) of the I.T. Act, 1961 gives the similar status to
acharitable or religious trust. Therefore, the basic exemption of Rs 2,50,000/- shall also be
available to charitable or religious trust for the purpose of applicability of audit required as per
provisions of Section 12A(b) of the I.T. Act, 1961.

Q. A - Tenant
( proprietorship Co., simple tenancy for last 40years )
B - Landlord ( individual - property is 70 years old )
C - New Lessee ( Corporate entity )

1. A is under B, a simple tenancy / occupant under WB Tenancy act.
2. A receives from C, a consideration amount to give up on tenancy rights.
3. C wants from B, a Lessor-Lessee agreement for 99 years by paying “X”amount plus monthly
licence fees of 15000.

Query :

a. On amount received from C ( see point 2 ) :
is GST applicable.
If yes, is it under RCM.
Is ITC available to C.

b. on “X” Amount paid by C to B ( see point 3 )
is GST applicable.
If yes, is it under RCM.
Is ITC available to C.

Ans
a- Receipt of consideration for surrender of tenancy rights by A cannot be subjected to reverse
charge GST in hands of C and hence if at all the liability arises it has to be billed By A to C as A
becomes the recipient of service if the same is treated as toleration of an act and applying
provisions of Sch II to CGST Act, 2017 read with Sec 7 of the CGST Act, the same becomes a
supply. As regard ITC, assuming A charges GST and it is a commercial project ITC will be
available to C. For residential project, No ITC to be available to C.

b- On X amount paid by C to B plus monthly licence fee, GST will be applicable @ 18% except
under the following conditions:

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