Decided 6 October 2026. The Surat Bench of GSTAT has dismissed three department appeals demanding GST under reverse charge from assignees of GIDC leasehold plots at Ankleshwar. Following the Gujarat High Court in Gujarat Chamber of Commerce and Industry, now final after the Supreme Court dismissed the department's SLPs, the Tribunal held that assignment of leasehold rights is a transfer of immovable property and not a supply.
Case at a glance
| Cases | AC, CGST Division-IX, Ankleshwar v. Pragna Chemical Industries; Shivabhishek Industrial Park Pvt. Ltd.; Kumar Packaging |
| Forum | GSTAT, Surat Bench (Division Bench Court No. I) |
| Appeal Nos. | APL/59, 82 and 83/SRT/2026 |
| Date of order | 6 October 2026 (operative part pronounced 29 September 2026) |
| Key ruling followed | Gujarat Chamber of Commerce and Industry v. Union of India (Guj HC, 03.01.2025); SLP dismissed 21.07.2026 |
| Result | Department's appeals dismissed |
Facts of the case
In the lead case, a GIDC plot at Ankleshwar was auctioned by MSTC on behalf of the central excise department in 2018 to recover another company's dues. The leasehold rights were transferred by GIDC to the respondent in 2019.
The department demanded GST from the assignee under RCM, invoking section 74 and imposing a further penalty under section 122(2)(b), even though it had itself conducted the auction. The appellate authority set aside the demands.
Issue before the Tribunal
Is assignment of leasehold rights in a GIDC plot to a third party a taxable supply?
What the Tribunal held
- The case is covered by the Gujarat High Court's judgment: assignment of leasehold rights in land and building allotted by GIDC is a transfer of benefits arising out of immovable property, not a supply under Schedule II para 5(b).
- The Bombay High Court in Aerocom Cushions (09.01.2026) agreed with the Gujarat High Court for MIDC plots. The Supreme Court dismissed the department's SLPs on 22.05.2026 (Aerocom) and 21.07.2026 (Gujarat Chamber).
- The jurisdictional High Court's judgment binds the Tribunal; a proposed review does not dilute it without a stay.
- GST is not leviable. Questions on section 74, section 122(2)(b) and RCM did not survive. The appeals were dismissed.
Practical takeaways for taxpayers
- Assignees and assignors of GIDC, MIDC and similar industrial plots can resist GST demands on leasehold assignment.
- Pending notices on such transactions should be answered by citing Gujarat Chamber of Commerce and Aerocom Cushions and the SLP dismissals.
- Refunds of GST already paid on such assignments may be explored within the limitation period.
Frequently asked questions
Is GST payable on transfer of GIDC/MIDC leasehold plots?
No, according to the Gujarat and Bombay High Courts, whose judgments the Supreme Court declined to disturb.
Does this apply to assignments under department auctions?
Yes; the lead case itself arose from an auction conducted for the department.
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This summary is based on the order of the GST Appellate Tribunal, Surat Bench in Appeal Nos. APL/59, 82 and 83/SRT/2026. It is general information, not legal advice; the outcome of any case depends on its own facts and the full text of the order.