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Circular No. 101/20/2019-GST

1

F. No. 354/27/2019-TRU
Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit
****
North Block, New Delhi,
Dated the 30
th
April, 2019
To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioner of Central Tax (All) /
The Principal Director Generals/ Director Generals (All)

Madam/Sir,

Subject: 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 -reg.

Representations have been received by the Board seeking clarification regarding
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.
2. The matter has been examined. The entry at S. No.41 of Notification 12/2017 –
Central Tax (R) dated 28.06.2017 reads as under:

Sl.
No
Chapter,
Section,
Heading,
Group or
Service
Code
(Tariff)
Description of Services Rate (per
cent.)
Condition
(1) (2) (3) (4) (5)
41 Heading
9972
“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
NIL NIL

Circular No. 101/20/2019-GST

2

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.”

3. It is hereby clarified that GST exemption on the upfront amount (called as premium,
salami, cost, price, development charges or by any other name) payable for long term lease
(of thirty years, or more) of 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 is admissible irrespective of whether such upfront amount is payable or
paid in one or more instalments, provided the amount is determined upfront.

4. Difficulty if any, in implementation of this Circular may be brought to notice of the
Board.


Yours Faithfully,


(Shashikant Mehta)
OSD, TRU
Email: shashikant.mehta@gov.in
Tel: 011 2309 5547

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circulars no 101 20 2019 gst | iKargos