Leasing of Fit-Outs and Infrastructure in Industrial Park Is Mixed Supply and Taxable at 18% | AAR

Case Details: TCG Urban Infrastructure Holdings (P.) Ltd., In re - [2025] 172 taxmann.com 328 (AAR-WEST BENGAL)

Judiciary and Counsel Details

• Dr Tanisha Dutta, Joint Commissioner, CGST & CX & Joyjit Banik, Additional Commissioner, SGST
• Priyajit Ghosh, Vikash Agarwal & Ms Yamini Agarwal, CAs, for the Appellant.

Facts of the Case

The applicant, engaged in leasing fit-outs and infrastructure, entered into an agreement with BIPPL, which held a 90-year sub-lease of plots for setting up an electronics industry. BIPPL constructed various buildings and sub-leased them in a bare-shell condition to its licensees. To facilitate infrastructure support, the applicant provided fit-outs and related assets on hire to the tenants of BIPPL’s sub-lessees. The applicant did not transfer possession or control of the immovable property but granted access to scheduled fit-outs in return for rental consideration, as stipulated in the ‘Agreement for Hire of Fitted Assets.’ The applicant sought an advance ruling on the classification and taxability of such activity.

AAR Held

The Hon’ble West Bengal AAR held that the applicant’s services fell within the scope of leasing or rental services under Sl. No. 17(viii) of Notification No. 11/2017-Central Tax (Rate), dated 28-06-2017. The authority held that the applicant’s activity constituted a mixed supply, subject to GST at the highest applicable rate. Since the supply of fit-outs and infrastructure was provided alongside leasing services, the entire transaction attracted GST at 18%.

List of Cases Referred to

• Varachha Co-op. Bank Ltd., In re [2023] 156 taxmann.com 4/[2024] 82 GSTL 77 (AAAR-GUJARAT) (para 4.6).