However, in the case mentioned above, there is usually no movement of goods and, since there is practically no movement, Part B cannot be presented and, therefore, no E-Way invoice can be issued. Therefore, one can take the position of not issuing an e-way invoice. In the event that the department asks a question, we must justify it and explain that the transaction was in the manner of selling and renting, due to which there was virtually no movement of goods. As a result, no electronic waybill could be generated. For the purposes of Article 10(1)(c) of the IGST Act, the place of delivery of the goods where delivery does not involve the carriage of the goods by the supplier or consignee shall be the place of those goods at the time of delivery to the consignee. In the case of such a sale, there will be no physical displacement of the assets of the tenant`s premises to the assumptions of the lessor. A modest attempt to list the impact of the GST on the sale-leaseback transaction. As ITAT.ORG:(i) contorted, the true intention of the parties in entering into the purchase and lease agreement must be inferred from the words of the agreement in a tangible and objective manner and not from a hypothetical assessment of the appraiser`s alleged reason for tax avoidance. It is clear from the lease and the invoice that the ownership of the equipment was that of the appraiser. There was a transfer of ownership. The fact that the transaction was carried out by HSEB in order to raise funds for its day-to-day needs and that HSEB decided to draw on the asset sale and lease system as a means of raising funds at a lower cost is not binding on the appraiser. HSEB`s ™ intention to proceed with the transaction cannot be transferred to the appraiser (Industrial Development Corporation of Orissa 268 ITR 130 (Ori), Rajasthan State Electricity Board 204 CTR 415 (Raj) and Gujarat Gas Company 308 ITR 243 (Guj) followed); Capital gain – Treatment of ordinary losses.

Because the leaseback property is generally held for use in the seller`s business or business, it is eligible for the treatment of ordinary capital gains losses. Under section 1231 of the Internal Revenue Code, if the property is held during the long-term holding period, the gain on the sale is taxable as a long-term capital gain, with a few exceptions, to the extent that the gain exceeds the losses in the same year from the sale of other property under section 1231. However, the profit is taxable as ordinary income up to the amount of the reconquest income. However, in the event that the sale results in a loss, it is fully deductible as an ordinary loss to the extent that the loss exceeds the gains realized under section 1231 from the sale of other property in the same year. This can be a significant advantage for the seller in a sell-lease-sell transaction. Deductions can be recovered. The impact of a takeover on the sale-leaseback transaction must be considered, as the sale of the property as part of a sale-leaseback process may trigger depreciation, capital tax credits and other types of recovery. > All the facts in the above example remain the same, except that the counterpart of the sales is Rs. 9 lakhs.

Loss of residual assets. Perhaps the biggest disadvantage of sale-lease-assignment is that the seller transfers ownership to the buyer. Landlords can minimize this inconvenience by including a buyback option in the lease. However, a buy-back option changes the way the assignment-lease-lease-assignment contract is reported for accounting purposes. The lease is recognised and capitalized as an asset, and the obligation to make future lease payments is reported as a liability. In the case of a typical sale-sale-leaseback, an owner sells properties used in their business to an independent retail investor or institutional investor. At the same time as the sale, the property is returned to the seller for a mutually agreed period of time, usually 20 to 30 years. Higher return rate. The buyer usually receives a higher return on a lease of sale than with a conventional loan agreement. In addition, the buyer may be able to circumvent state usury laws that limit the interest rate on traditional financing.

In addition, at the end of the rental period, the buyer receives the benefit of any increase in the value of the property. Finally, the buyer can use the purchase with mortgage financing; This can further increase the return on cash invested. High rent payment. If the rental market weakens, the seller may be tied to the higher rental price negotiated at the time of the sale-leaseback. Rent payments under the lease cannot be adjusted without the buyer`s consent, which means that the seller is bound by the interest rate implied in the assignment-leaseback for the entire term of the lease. .