GST exemption on the upfront amount payable in installments for long term lease of plots, under Notification No. 12/2017 – Central Tax (R) S. No.41 dated 28.06.2017

There has been representations submitted to the CBIC for providing clarification on admissibility of GST exemption on the upfront amount which is determined upfront but is paid or payable in installments for long term (thirty years, or more) lease of industrial plots or plots for development of financial infrastructure under Notification 12/2017 – Central Tax (R) S. No.41 dated 28.06.2017.

CBIC post examination of the representations issued below clarification in this regard –

1. GST exemption on the upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable for long term lease

2. The long term lease of thirty years, or more

3. Exemption is applicable on industrial plots or plots for development of infrastructure for financial business under Entry No. 41 of Exemption Notification 12/2017 – Central Tax (R) dated 28.06.2017

4. Exemption is available on such upfront if the amount is payable or paid in one or more instalments, provided the amount is determined upfront

SL. No GST Circular No. Summary
1 Circular No. 101/20/2019 -GST dated 30th April 2019

F. No. 354/27/2019-TRU

Heading – 9972 – GST Rate – NIL

“Upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable in respect of service by way of granting of long term lease (of thirty years, or more) of industrial plots or plots for development of infrastructure for financial business, provided by the State Government Industrial Development Corporations or Undertakings or by any other entity having 50 per cent. or more ownership of Central Government, State Government, Union territory to the industrial units or the developers in any industrial or financial business area.”

Note – This is for information only. For exact details of changes, the notification/Circular may please be referred to, as and when they are issued.

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