Long-Term Lease of Industrial Plots – Entry 41

# Long-Term Lease of Industrial / Financial Plots – Entry 41

## What is Exempt?

Upfront amount (called premium, salami, cost, price, development charges, etc.) payable for grant of a long-term lease of 30 years or more of:

• Industrial plots; OR
• Plots for development of infrastructure for financial business

Provided by:

• State Government Industrial Development Corporations / Undertakings; OR
• Any other entity having ≥ 20% ownership of CG / SG / UT (direct or through a wholly-owned entity of CG/SG/UT)

To industrial units / developers in any industrial or financial business area.

## Mode of Payment of Upfront Amount

Exemption is available whether upfront is paid in one lump sum or in instalments, provided the amount is determined upfront at the time of lease.

## Preferential Location Charges (PLC) / Location Charges

Location charges or PLC collected along with the lease premium for the long-term lease are treated as part of lease consideration → also EXEMPT under Entry 41.

## Conditions to Sustain the Exemption

1. Leased plots must be used only for the allotted industrial/financial activity in the industrial or financial business area.

2. Concerned State Government is to monitor and enforce compliance.

3. On violation or subsequent change of land use:

• Original lessor, lessee and any subsequent lessee/buyer/owner are jointly and severally liable to pay central tax on the upfront lease amount, with interest and penalty.

4. Lease/sale agreements (original AND subsequent) must contain a clause stating:

• Exemption was granted subject to these conditions, AND
• All parties undertake to comply.

## Quick Test

→ EXEMPT under Entry 41 (including PLC).