CBIC has issued a clarification on admissibility of GST exemption on upfront amount, paid or payable in installments for long term lease of industrial or developmental plots, under Notification 12/2017, on 30th April,2019. The circular was issued in furtherance of several representations.
Entry No.41 of Exemption Notification 12/2017 provides for exemption on the upfront amount paid by the entities to the government for a long term lease. Upfront amount (called as premium, salami, cost, price, development charges or by another 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.
The Board has clarified that this exemption would be admissible irrespective of whether such upfront payment is payable at once or paid in installments. The only condition attached to the grant of the exemption is that the amount should be determined upfront.
Click here to see the circular.
