Leasing Services to Government Entry 41

GST exemption for long-term lease upfront charges applies even when paid in instalments if amount is fixed upfront.

Exemption applies to an upfront amount for long-term leases of industrial or financial infrastructure plots by State development corporations or entities with at least 20% government ownership; the exemption remains available even if the amount is paid in instalments provided it is determined upfront. Leased plots must be used for the allotted industrial or financial purpose, and State Governments must enforce this. On violation or change of land use, original lessor, lessee and any subsequent transferee are jointly and severally liable for central tax on the upfront amount.