Page 136 - GSTL_13th August 2020_Vol 39_Part 2

222 GST LAW TIMES [ Vol. 39
(14) that without prejudice to the above submissions, on perusal of the
Long term lease Agreement, it can be seen that the Applicant is also
involved in the development of infrastructure on the land given on
long term lease by the RLDA. Along with the development of resi-
dential plots, the Applicant is also engaged in developing the roads,
sewage system, laying of the street lights, etc. The said transaction
and any upfront amount paid in this respect (whether in install-
ments or otherwise) is exempt under the provisions of CGST Act,
2017 by virtue of Entry No. 41 under Notification No. 12/2017-
Central Tax (Rate), dated 28-6-2017. The said entry is reproduced
hereunder for your kind perusal :

41 Heading “Upfront amount (called as premium, NIL NIL
9972 salami, cost, price, development charg-
es 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 fi-
nancial 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 Govern-
ment, State Government, Union territo-
ry to the industrial units or the devel-
opers in any industrial or financial
business area.”

(15) that further as per Government of India, Ministry of Finance, Circu-
lar No. 101/20/2019-GST, dated 30-4-2019 it has been clarified that
GST has been exempted on the upfront amount payable whether
paid in installments or otherwise for long term lease of plots (of
thirty years, or more) under Notification No. 12/2017-Central Tax
(Rate), Serial No. 41, dated 28-6-2017. Upfront amount called as
premium payable in respect of service by way of grant of long term
lease (of 30 years or more) of plots for development of infrastructure
for financial business provided by undertaking having 50% or more
ownership of Central Government to the developers in financial
business area. As such through this circular no GST is applicable on
the RLDA land;
(16) that it can therefore be seen on perusal of the Entries in the Notifica-
tion and the nature of activity undertaken by the Applicant Compa-
ny that the present transaction of long term lease is squarely cov-
ered under Entry No. 41 of Notification No. 12/2017-C.T. (R), dated
28-6-2017 and is exempt from GST from the very inception of CGST
Act, 2017;
(17) that therefore, in our considered view, no GST is applicable on the
amount paid by the Applicant Company to RLDA and the said
GST LAW TIMES  13th August 2020  136