Cos. filed cases against GST authorities on Long term Land Lease Some companies have dragged the government and the indirect tax department to court over goods and services tax (GST) levied on long-term lease agreements. The companies filed a writ petition in the Rajasthan High Court demanding that either GST be removed from such transactions or they be allowed to claim credit. As per the current regulations, 18% GST is levied on any long-term lease transactions and industry experts said the cost of the GST paid becomes pure cost as it cannot be used as input tax credit in case the recipient wishes to construct any commercial building there. As of now, GST is levied on lease of land for 30-year or more and that becomes a cost as it cannot be set off if a hotel or any other commercial property is built on it. A majority of such land is government-owned and leased to build hotels or ports. According to the GST framework, to avail input tax credit, companies have to prove that taxes paid on raw material or any other input was used towards making the final product. Input tax credit is a mechanism where part of the taxes paid on raw materials can be set off against future tax liabilities. The question in this case is, whether the land leased from the government is an input for the recipient if the company is building a hotel or a port there. Some companies claim that if a hotel is built on that land, then the leasing should be considered as input. The objective of GST is seamless credit and removal of tax cascading effect which gets defeated by the present provision of blocked credit under section 17(5) of CGST Act 2017 for GST paid on long term lease of land.