Levy of GST— In the instant case, the applicant M/s Tangerine Skies Private Limited engaged in manufacturing and exporting of Readymade Garments having its manufacturing plant at Gurgaon.

The applicant sought Advance Ruling on the following questions/issues

1. The applicant is seeking clarification on the imposition of the GST on the land premium to be payable to the RIADA.

2. What is the applicability of serial No. 41 of notification 12/2017 under heading 9972 of GST issued by the central government on the payment of upfront lease premium on future installments?

In the present case (i) the lease is for 30 years, (ii) The lessor i.e. RIADA is a corporation established by the State Government but the premium paid for the lease in 10 equal instalment over a period of 5 years. After paying the first instalment as upfront the applicant has received the service i.e. the industrial land/shed for the period of 30 years from the date of allotment.

Since the applicant has admitted himself that the word upfront means “beforehand” or “before the actual evident is due”, the so called premium paid in instalment after the allotment does not qualify the criteria of upfront amount.

Held that— The amount payable in instalment to the Ranchi Industrial Development Authority (RIADA) on lease in respect of the scheduled land/ shed for a period of 30 years from the date of allotment after getting the allotment letter does not come under the category of upfront payment. Hence, it is not exempted from the GST vide serial no 41 of notification 12/2017 under heading 9927 of GST.