The Karnataka Authority for Advance Ruling (AAR), has held that lease or letting out of building for business or commerce is a supply and attracts 18% GST.
The applicant, Karnataka Text Book Society is engaged in the business preparation, printing, and distribution of textbooks to all Government schools and aided schools.
The applicant is receiving rental income by leasing a property to Karnataka Food and Civil Supplies Corporation Ltd. The applicant approached the authority to clarify whether GST should be collected on rental income from Karnataka Food and Civil Supplies Corporation Ltd.
The Authority observed that as per Sl. No. 2(b) of Schedule II of the Goods and Services Act 2017 any lease or letting out of the building including commercial, industrial or residential complex for the business or commerce, either wholly or partly, is a supply.
The Coram of Dr. M. P. Ravi Prasad, Member (State) and Mr. T. Kiran Reddy, Member (Central) has held that the GST should be collected on the rental income from the property leased by the applicant to Karnataka Food and Civil Supplies Corporation Ltd at 18%.
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