Dipen Agrawal

GST department has put the industry in a state of fear by sending summons and starting investigation on number of transfers of leased lands have taken place in Maharashtra Industries Development Corporation (MIDC) industrial area since July 2017. Dr Dipen Agrawal said that, the department seems to be taking a stand after five years since inception of GST that the subsequent transfer of leased land from one party to the other comes under the purview of supply of service and hence 18% GST is leviable on the whole of the sale consideration of the transaction, though, MIDC is exempt.

If this really goes through then it will sound a death knell for all the MSMEs who have sold their plots since July 2017 and also future transactions.

Chamber of Associations of Maharashtra Industry and Trade (CAMIT) an apex body representing industry & trade associations across Maharashtra has taken up this issue and has represented its case to Devendra Fadnavis, the Dy.CM & Finance Minister, Govt. of Maharashtra, to take up the issue with the GST council, added Dr Agrawal.

Chamber of Small Industries Association (COSIA) an all-India MSME apex body has also taken up the issue and represented the case before Nirmala Sitharaman, Finance Minister, Government of India, GST council and also before all state Finance Ministers, as they are the members of GST Council.

The demands raised by GST Department is huge and especially for the MSMEs this is going to break their back. This is a Pan India issue and presently, there are thousands of units in Maharashtra alone, which hasn’t paid this retrospective levy of GST on the assignment of leasehold rights of such land taken on lease from MIDC on the understanding that the “assignment of leasehold rights in land” is akin to “sale of land” and falls under Schedule III of the CGST Act on which GST is not payable. All have paid stamp duty as per the sale of land, and also paid Income tax on short term and long-term gains considering as deemed ownership, and the premium is paid to MIDC for transferring the lease. Needless to say, that during the service tax regime, this was not chargeable as service tax, as the immovable property was defined in the act.

As we all know that during COVID times many of the MSME have suffered big losses and some had to shut down and sell their plots, just to square up their liabilities.

CAMIT and COISA jointly has brought together the associations from all over India under one platform and are taking up their case at all State levels as well as at the Centre. CAMIT has written to all the concerned departments and requested to amend/clarify the GST rule for the long-term subsequent lease with retrospective effect and give relief to the thousands of MSMEs from all over India by considering it in schedule III. Which says Sale of land and building is neither good nor service.

Hope is that the said issue will be taken up in the forthcoming GST Council meeting scheduled for 18th February and shall be resolved favourably in the interest of all stakeholders.

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Vistara and Air India

Singapore Airlines (SIA) and Tata Sons have coincided to merge Air India and Vistara. SIA will be investing ₹2,058.5 Cr in Air India as part of the transaction. This will give SIA  25.1 percent stake in an enlarged Air India group.

SIA said, “Based on SIA’s 25.1 per cent stake post-completion, its share of any additional capital injection could be up to ₹50,2000 lakh, payable only after the completion of the merger.”  

Tata group owns 51 percent stake in Vistara, whereas 49 percent is held by SIA. With Vistara and Air India’s merger, Tata Sons is aiming to keep only one airline brand under its ambit.

Over past few months, Air India and Vistara have been competing for the number two spot in India. After the merger, Air India will become country’s largest airline behind IndiGo.

Around a year ago, Since Tata bought Air India for ₹18,000 Cr as part of a government disinvestment. The company is also planning to merge other airlines under one brand. That would include Air Asia India and Air India Express.  

Chairman of Tata Sons N Chandrasekaran while commenting on the merger said, ‘the merger of Vistara and Air India is an important milestone in the journey to make Air India a truly world-class airline.’

The CEO of SIA Goh Choon Phong said, “We will work together to support Air India’s transformation program, unlock its significant potential, and restore it to its position as a leading airline on the global stage.”

Vistara CEO Vinod Kannan said, “Air India is a legendary brand with a rich legacy that pioneered civil aviation in India. There is enormous potential for an airline group with the scale and network of the combined entity.”

The proposed deal is expected to be complete by March 2024. 

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Representational image

On the weekend before Diwali this year, more than 48 lakh bottles of alcohol worth over ₹100 crore were sold in Delhi. After two years of subdued festivities because of the COVID-19 outbreak, people celebrated Diwali with much fanfare, which was a dry day in the city.

A senior excise department officer claimed, “That (dry day) led to a rush on the weekend from Friday to Sunday with heavy liquor sales across the city. More than 48 lakh bottles were sold on Friday-Sunday, worth over Rs 100 crore, ahead of Diwali on October 24,” he added.

According to the officer, Delhi sells about 12.50 lakh bottles of alcohol on a daily basis. The officials stated, on Friday, 13.56 lakh bottles were sold for over ₹30 lakh and on Saturday, 15.09 lakh bottles were sold for about ₹32 lakh.

A major sale of more than 19.42 lakh bottles worth over ₹42 lakh was made on Diwali eve on October 23 this year. Due to the attention given to Arvind Kejriwal government’s alcohol policy and the continuing CBI investigation into an alleged ‘scam’ in its execution, the excise industry in Delhi has been severely impacted.

The Excise Policy 2021–22 was cancelled by the Kejriwal government administration after Lieutenant Governor VK Saxena suggested a CBI investigation into alleged rules violations and procedural errors in its execution beginning on November 17, 2021.

From August 31 of this year, the retail licences provided to private parties for 849 liquor vends under the policy ceased to exist. The decision was made to go back to the excise system, which was in place before November 17, 2021. Over 460 alcohol vending machines are operated by Delhi government undertakings under the previous excise system.

By the end of the year, officials stated, the four companies should operate 700 liquor vends.

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