In re Tangerine Skies Private Limited (GST AAR Jharkhand)
The amount payable in instalment to the Ranchi Industrial Development Authority (RIADA) on lease in respect of the scheduled land/ shed for a period of 30 years from the date of allotment after getting the allotment letter does not come under the category of upfront payment. Hence, it is not exempted from the GST vide serial no 41 of notification 12/2017 under heading 9927 of GST.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, JHARKHAND
Note: Under Section 100 of the JGST Act 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of JGST Act 2017, within a period of 30 days from the date of service of this order.
The applicant M/s Tangerine Skies Private Limited (herein after referred to MHTL) having GSTN No- [20AAGCT3424Q1Z8] is a company registered under companies Act, 2013 . The Company engaged in manufacturing and exporting of Readymade Garments having its manufacturing plant at Gurgaon.
1. To expand its operations, the Company has taken land from Ranchi Industrial Area Development Authority (RIADA) on lease for 30 years and is planning to set up an industrial unit for manufacturing of “Manufacturing of Garments”.
2. As per the lease terms lessee is required to pay the upfront premium, which shall be total amount to be paid for lease. However, as per the terms of RIADA if the company is into mega IT industry/textile industry programme of RIADA then the company shall have option to pay land premium in 10 equal installments over a period of 5 years. Since the Applicant qualifies all the conditions for availing this scheme, the upfront premium shall be paid by the applicant in 10 installments over a period of five years.
3. The Lessor and lessee has entered in lease arrangement and relevant terms and conditions of Lease Deed which are relevant for kind consideration are reproduced below:-
i. The period of tenure of lease in respect of the scheduled land/shed shall be for a period of 30(thirty) years from the date of allotment.
ii. Rs. 22,48,814.00 plus taxes shall be payable as first installment of premium of land followed by 9 installments payable over a period of next four and half year.
