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The Gujarat High Court has ruled that Goods and Services Tax (GST) does not apply to the transfer of leasehold rights on industrial land allocated by the Gujarat Industrial Development Corporation (GIDC). This decision provides significant relief to industries involved in such transactions, removing a contentious tax burden. The judgment addresses whether GST is applicable to leasehold land transfers, offering clarity on a long-debated issue. It is expected to influence similar disputes across courts, including cases in the Bombay High Court regarding industrial land transactions by the Maharashtra Industrial Development Corporation (MIDC). Petitioners argued that leasehold land transfers should be treated as sales of land, which are exempt from GST under the law. They highlighted that the 18% GST imposed on these transactions, in addition to state-imposed stamp duties, results in cascading taxes and makes deals economically unfeasible. The ruling, issued by Justices Bhargava D Karia and D N Ray on January 3, has been welcomed by legal and tax experts. Abhishek A. Rastogi, founder of Rastogi Chambers, noted that the issue of double taxation needed scrutiny, as GST demands and show cause notices often result in additional burdens for businesses. Saurabh Agarwal, Tax Partner at EY, called the decision a landmark ruling, bringing relief and clarity to businesses. He added that GIDC's retrospective demand for 18% GST had created liabilities amounting to approximately ?8,000 crore, severely impacting MSMEs. Agarwal emphasised the broader debate over whether long-term leases equate to land sales, which predates the GST regime. The ruling is expected to act as a strong precedent, but experts believe a final resolution will require intervention from the Supreme Court or clarification by the GST Council to ensure legal certainty and a more favourable investment environment. (CNBCTV18)